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THE  LIBRARY 

OF 

THE  UNIVERSITY 

OF  CALIFORNIA 


HENRY  RAND  HATFIELD 
MEMORIAL  COLLECTION 

PRESENTED  BY 

FRIENDS  IN  THE  ACCOUNTING 

PROFESSION 


GOODYEAR'S 


HIGHER  ACCOUNTING 


A  reference  book  for  Accountants  and 
Commercial  Teachers 

A  text  book  for  Students  in  Advanced 
Accounting  Methods 


by- 


SAMUEL  H.  GOODYEAR,  A.  M. 

Author  of  the  Goodyear  Commercial  Series 


AND- 


LLOYD  E.  GOODYEAR,  Master  of  Accounts 

Author  of  Goodyear's  Bank  Accounting 


SECOND  EDITION 


1909 

GOODYEAR-MARSHALL  PUBLISHING  COMPANY 

CEDAR  RAPIDS,  IOWA 


Copyrighted  1907 
GOODYEAR-MARSHALL  PUBLISHING  COMPANY 


no  7 


Introduction. 


In  preparing  this  work  the  authors  have  had  in  mind  three  classes : 

i.  Business  men  and  accountants  who  want  a  reference  book  in  specialized  accounting 
methods,  rather  more  technical  and  scientific  than  the  usual  bookkeeping  texts. 

2.  Teachers  who  want  a  text  in  advanced  accounting  from  which  supplementary  work 
can  be  chosen  for  their  graduating  pupils  who  are  preparing  for  special  lines  of  business. 

3  The  class  of  commercial  teachers — rapidly  increasing — who  want  a  carefully  developed 
course  of  higher  text  book  accounting  for  advanced  work,  that  dispenses  with  the  voucher  and 
laboratory  methods  that  are  used  successfully  in  initiatory  accounting  study. 

We  have  consulted  successful  accountants  and  business  managers  freely  and  have  spared 
neither  time  nor  pains  in  the  effort  to  produce  a  manual  of  accounting  that  would  represent 
modern  methods  which  could  be  safely  followed  by  bookkeepers  and  teachers  in  the  special 
lines  of  accounting  introduced. 


M513271 


CONTENTS. 

Commission  Accounting              -  Page      3 

Real  Estate  Titles     -             -             -  -                         "22 

Real  Estate  and  Insurance  Accounting  -                  "       29 

Practical  Banking     -             -             -  -                                 41 

Corporation  Accounting              -  58 

Factory  Accounting              -             -  -             -           "       69 

Railway  Accounting      -             -  -             -                  "91 

Wholesale  Accounting          -             -  -             -           "113 


Commission  Accounting. 

A  Commission  Merchant  is  one  who  buys  or  sells  merchandise  for  others  in 
specified  quantities  called  Shipments  or  Consignments,  receiving  for  his  compensation  a  certain 
agreed  percentage  of  the  cost  of  the  goods  purchased  or  of  the  gross  proceeds  of  the  goods 
sold. 

In  large  cities  there  are  many  commission  firms  that  are  thus  engaged  in  buying  and  sell- 
ing consignments  of  goods,  mostly  farm  and  dairy  products,  grain,  live  stock,  etc.,  for  persons 
who  live  at  a  distance.  Commission  houses,  as  a  rule,  also  buy  and  sell  goods  on  their  own 
account. 

The  terms  Shipment  and  Consignment  are  thus  distinguished: 

When  you  send  goods  to  another  to  be  sold  on  your  own  account,  the  goods  are  spoken 
of  in  your  office  as  a  Shipment. 

Goods  received  by  you  from  another,  to  be  sold  on  his  account,  are  referred  to  in  your 
office  as  a  Consignment. 

Invoice  of  Shipment,  This  is  an  itemized  statement  of  goods  that  are  shipped  to 
a  commission  firm  to  be  sold  on  account  and  risk  of  the  owner.  It  should  be  sent  by  mail  to  the 
consignee  at  the  time  the  goods  are  shipped,  giving  the  quantities  in  the  shipment,  the  method 
of  shipment,  the  amount  of  transportation  charges  paid  and  unpaid.  Usually  the  prices  of  the 
articles  are  not  given,  since  the  goods  are  not  sold  to  the  consignee,  but  are  merely  delivered  to 
him  to  be  sold  for  the  owner. 


A  Model  Invoice  of  Shipment, 


a& 


Below  please  find  invoice  of  Merchandise  sent  yo 


Freight  prepaid  $  *7"  — 

risk  of — Lagabfag&^ri&efciiag^. 


UNPAID    $_. 


_TO    BE   SOLD   ON   ACCOUNT   AND 


Consignors 


.^Jt^^^^^^^y 


>f~oo 

^-t^y  /^Jrf^Js^ts 

JToo. 

r&       ^y 

" 

i 

Account  Sales. 

This  is  an  itemized  account,  rendered  by  the  consignee,  or  Commission  Merchant,  to  the 
shipper  or  owner  of  the  goods,  at  the  time  when  the  goods  in  a  given  shipment  have  been  sold. 
It  shows  all  sales  and  charges  and  the  net  proceeds,  or  difference  between  the  total  sales  and 
total  charges. 


HIGHER  ACCOUNTING 


Standard  Form  of  Account  Sales. 

From 


For  Merchandise  Received 


Consignment  No 


Folio  l/'d'  C s  C^---<^C^^^Z^7-^/ 


.Clerk. 


foo 


SOQ 


SALES 


-^>-fsl/  /JtZSiJs. 


6> 


^fo 


CHARGES 


Freight  $ 


Drayage  $  /o  >f£g_^         Storage  $  7^£ 


Inspection  $ 


Insurance  $  K~'° 


Commission  $  /l/ 


Other  Charges  $ 


Total  Charges 


Net  Proceeds 


Special  Records  Required. 

The  commission  merchant  needs  special  records  to  show  the  ownership  of  the  merchandise 
he  sells,  and  the  outlays  he  makes  for  each  consignment  and  the  amount  received  from  it. 

Left  Folio  of  Commission  Sales  Ledger. 

Consignment  No.   1  STUDENT  6  CO. 


190— 
Sep. 


10 


15 


Ledg. 
Fol. 


Received  per  B.  C.  Railway,  freight  prepaid, 
500  bu.  Barley 

500  bu.  Corn 

Drayage 

Insurance 

Storage 

Commission 

Student  &  Co.— Proceeds  credited 


10 

7 
14 

40 
70 

80 

32 

527 

90 

10 

560 

COMMISSION 


A  Receiving  Book  is  required,  giving  in  tabulated  form  for  ready  reference  all  essential 
facts  pertaining  to  each  consignment,  before  it  is  placed  on  sale. 


Form  of  Receiving  Book. 


Date 

Consignor  and  Address 

ARTICLES 

CARRIER 

Freight 
Unpaid 

Gross  Weight 

Folio 

190- 

Dec. 

10 

Crescent  Mills 
Akron 

600  Sks.  Flour 
Invoiced  at  $1.55 

B.  C.  R.  R. 

18 

30000 

C.  S. 
1 

10 

C.  C.  Smith 

50  Brls.  Cranberries 

B.  C.  R.  R. 

13 

90 

7500 

c.  s. 

Fairfax 

1 

A  Commission  Sales  Ledger  is  used  for  keeping  itemized  accounts  with  the  different  con- 
signments received.  These  accounts  are  kept  in  different  ways,  but  in  every  case  the  amounts 
received  for  consignments  are  entered  as  credits  and  the  charges  and  proceeds  of  consignments 
are  entered  as  debits. 

The  left  folio  of  a  consignment  account  on  page  4,  and  the  right  folio  below  illustrate 
one  of  the  most  common  forms  of  a  consignment  ledger. 

When  the  goods  arrive,  they  are  compared  with  the  invoice  of  shipment,  and  a  memoran- 
dum entry  is  made  on  the  debit  side  of  the  account.  If  freight  and  other  charges  are  paid,  an 
entry  is  made  in  the  cash  book  debiting  the  consignment.  When  sales  are  made,  they  are 
entered  in  the  general  sales  book.  Debits  from  the  cash  book  and  credits  from  the  gen- 
eral sales  book  are  posted  to  the  commission  sales  ledger,  like  other  posting,  except  that 
all  entries  are  itemized. 

When  all  the  goods  belonging  to  a  consignment  have  been  sold,  the  commission  and  other 
charges,  if  any,  are  entered  and  the  net  proceeds,  or  the  difference  between  the  total  charges 
and  total  sales,  is  entered  on  the  debit  side,  as  shown  in  the  form,  and  the  consignment  is  closed. 

In  "Const.  No.  1,"  the  net  proceeds  is  credited  to  the  account  of  the  consignor.  When  this 
is  done,  an  account  with  the  consignor  should  be  opened  in  the  ledger,  and  the  net  proceeds 
should  be  posted  to  the  credit  of  this  account.  When  a  trial  balance  is  taken,  the  unbalanced 
consignments  should  be  included,  the  same  as  regular  ledger  accounts. 

Right  Folio  of  Commission  Sales  Ledger. 


COLLEGE,  CITY. 


190- 
Sep. 


S.  B. 

Fol. 


500  bu.  Barley 
500  bu.  Corn 


.62 
.50 


310 
250 


560 


HIGHER  ACCOUNTING 


LOOSE  LEAF  ACCOUNTING. 

The  rapid  expansion  of  business  in  all  lines  has  compelled  accountants  to  devise  new 
methods  adapted  to  the  new  conditions.  Loose  sheets  instead  of  bound  books  afford  many 
opportunities  for  saving  time  by  means  of  carbon  duplicating,  letterpress  copying,  and  self- 
indexing  of  ledger  account  sheets. 

In  no  department  of  business  can  the  loose  leaf  method  be  used  to  better  advantage  than 
in  commission  accounting. 

Loose  Leaf  Account  Sales. 

The  account  sales  sheet  illustrated  on  page  7,  is  a  modern  form  for  loose  leaf  accounting 
that  dispenses  with  the  receiving  book  and  the  commission  sales  ledger.  These  sheets  are 
arranged  in  a  pad  for  carbon  duplicates.  The  original  account  sale  is  made  on  the  white  sheet 
and  a  carbon  copy  is  made  on  the  yellow  sheet.  The  latter  is  punched  for  binding  on  a  sales 
binder.  The  yellow  sheet  contains  every  entry  that  would  be  required  in  the  receiving  book 
and  the  commission  sales  ledger. 

The  Account  Sales  Register. 

In  the  commission  business  the  repeated  credits  of  such  titles  as  Storage,  Insurance,  Com- 
mission, etc.,  call  for  a  register  with  special  columns  for  all  titles  belonging  to  a  commission 
sale,  so  that  these  separate  items  may  be  combined  and  carried  to  the  ledger  accounts  in  totals, 
thereby  omitting  a  large  percentage  of  the  ledger  entries. 

The  Account  Sales  Register  illustrated  on  pages  1  o  and  1 1  affords  a  short  method  of 
handling  the  general  accounts  that  pertain  to  a  commission  business.  A  single  line  across  the 
two  folios  is  devoted  to  the  various  charges  and  credits  that  belong  to  a  consignment.  After 
these  various  amounts  are  copied  on  the  register,  the  duplicate  account  sales  sheet  can  be  filed 
on  the  binder,  for  reference  if  any  item  is  required  at  a  later  date.  If  the  account  sales  is  cor- 
rect and  all  amounts  have  been  carried  correctly  to  the  register,  the  total  of  the  entries  in  cash 
book  credits  and  ledger  credits  will  equal  the  amount  in  total  sales  column.  The  student  will 
observe  the  method  of  securing  the  total  of  Cash  Credits.  The  footings  of  the  columns 
"Freight  Cr.,"  "Other  Cr.,"  "Cash  Advances  Cr.,"  "Proceeds  Rem.  Cr.,"  are  carried  in  the  col- 
umn, "Total  Cash  Cr.,"  and  are  there  added  and  brought  down  in  total  for  posting.  The  Led- 
ger Credit  columns  are  each  added  and  brought  down  for  posting.  The  additions  can  be 
proven  by  adding  the  total  of  "Cash  Credits"  and  the  several  amounts  in  "Ledger  Credits,"  the 
sum  being  equal  to  "Total  Sales  Dr." 

In  posting  from  the  account  sales  register,  Total  Sales  will  go  to  the  debit  of  "Consign- 
ment Sales,"  Total  Cash  Cr.  will  go  the  credit  of  "Consignment  Cash,"  Storage,  Insurance,  and 
Commission  will  each  have  ledger  credits,  Other  Cr.  will  go  to  "Sundry  Charges,"  and  Pro- 
ceeds Credited  will  go  to  the  credit  of  "Dealers'  Ledger."  Each  consignor  who  has  proceeds 
credited  will  have  an  account  in  the  dealers'  ledger  and  will  have  credit  for  his  net  proceeds. 

The  General  Sales  Book. 

When  a  merchant  makes  sales  from  consignment  goods  and  also  from  his  own  merchan- 
dise, he  will  need  special  columns  in  the  general  sales  book  for  these  different  classes  of  mer- 
chandise. In  this  set  two  ledgers  are  used,  a  general  ledger  for  all  general  accounts  of  the 
business,  and  a  dealers'  ledger  for  all  accounts  with  persons  from  whom  we  buy  on  account,  to 
whom  we  sell  on  account,  and  from  whom  we  receive  consignments  and  credit  the  net  proceeds. 
In  a  very  large  business  the  dealers'  ledger  could  be  subdivided  into  three  side  ledgers,  pur- 
chase ledger,  sales  ledger,  and  consignors'  ledger,  but  the  use  of  three  side  ledgers  would  re- 
quire two  additional  special  columns  in  the  cash  book. 

The  general  sales  book,  as  represented  on  page  9,  has  special  columns  for  consignment 
sales  and  merchandise  sales,  and  other  columns  for  amounts  sold  to  dealers  on  account  and  for 
cash  sales.  If  sales  are  made  and  notes  are  received  inpayment,  the  amounts  can  be  extended 
to  the  dealers'  column  and  Bills  Receivable  account  can  be  entered  in  the  dealers'  ledger,  rep- 
resenting amounts  due  from  dealers  on  their  written  promise  instead  of  their  verbal  promise. 


COMMISSION 


Model  Loose  Leaf  Account  Sales. 


Consignment  No.   <%> 


HIGHER  ACCOUNTING 


In  posting  from  the  general  sales  book,  each  dealer  will  be  debited  for  amount  of  sales  to 
him  on  account,  and  three  entries  for  the  totals  will  be  required  in  the  general  ledger,  the  title 
"Dealers'  Ledger"  being  debited  for  the  total  of  dealers'  column,  "Consignment  Sales"  being 
credited  for  the  total  of  Consignments  column,  and  "Merchandise"  being  credited  for  the  total 
Mdse.  column.     Cash  has  already  been  debited  for  the  cash  sales. 

The  Purchase  Book. 

The  purchase  book,  used  for  recording  the  commission  merchants'  own  purchases  of  mer- 
chandise, illustrated  below,  requires  special  columns  for  purchases  from  dealers  on  account 
and  for  cash  purchases. 

In  order  to  reduce  the  space  required  for  Merchandise  account  in  the  ledger,  it  is  good  ac 
counting  to  carry  all  outlays  of  cash  for  merchandise  charges  to  the  purchase  book,  so  that 
they  may  be  included  in  one  total  debit  of  Merchandise  for  the  given  period. 

In  posting  from  the  purchase  book,  each  dealer  will  be  credited  for  amount  of  purchase 
from  him  on  account,  and  two  entries  for  the  totals  will  be  required  in  the  general  ledger, 
"Merchandise"  being  debited  for  the  total  of  the  purchases  and  "Dealers'  Ledger"  being  credited 
for  the  total  of  dealers'  column.  Cash  has  already  been  credited  for  cash  outlays  for  merchan- 
dise. 

PURCHASE  BOOK=Commission. 


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The  Commission  Cash  Book. 

The  cash  book,  illustrated  below  and  on  page  1 I,  has  a  special  column  on  the  debit  side  for 
credits  of  dealers,  and  special  columns  on  the  credit  side  for  debits  of  dealers  and  for  consign- 
ment payments. 

In  posting  from  the  debit  side  of  the  cash  book,  each  dealer  will  be  credited  for  amount  re- 


Dr. 


COMMISSION 


/^V— Date 

L.F 

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"Dealers'  Ledger'*  for  the  total  of  Dealers'  column.  In  posting  from  the  credit  side  of  the  cash 
book,  each  dealer  will  be  debited  for  the  amount  paid  him  on  account,  and  two  entries  will  be 
required  in  the  general  ledger,  "Dealers'  Ledger"  being  debited  for  the  total  of  Dealers  col- 
umn and  "Consignment  Cash"  being  debited  for  the  total  of  Consignment  column. 


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12 


HIGHER  ACCOUNTING 


The  Dealers'  Ledger-Loose  Leaf. 

The  dealers'  ledger,  like  any  side  ledger,  contains  a  department  or  group  of  the  ledger  ac- 
counts, and  it  may  be  kept  in  any  style  of  ruling  desired.  In  a  large  business  involving  several 
hundred  accounts  with  dealers,  it  would  be  convenient  to  have  three  side  ledgers,  one  for  sales 
accounts,  another  for  consigners,  and  a  third  for  purchase  accounts.  In  the  present  set  a  single 
side  ledger  will  be  more  convenient,  requiring  only  one  special  column  for  Dealers'  Ledger,  in 
the  different  books. 

Loose  ledger  sheets,  constituting  what  is  called  Loose  Leaf  Ledger,  is  a  form  especially 
convenient  when  we  have  a  large  number  of  accounts  with  persons.  These  sheets  are  usually 
placed  in  a  patent  binder  and  are  so  arranged  that  they  can  be  readily  removed  when  accounts 
are  closed  and  are  no  longer  needed.  The  accounts  are  grouped  in  the  loose  leaf  ledger  on  the 
self-indexing  plan,  the  ledger  being  separated  by  index  sheets,  and  each  account  being  placed 
after  its  proper  index  sheet.  In  a  large  ledger  many  accounts  will  follow  each  index  letter,  and 
for  this  reason  each  account  sheet  will  be  numbered,  each  index  letter  having  a  series  of  num- 
bers. If  there  are  ten  account  sheets  with  titles  beginning  with  A,  they  will  be  numbered  from 
I  to  10  in  the  order  of  their  position,  and  the  next  one  beginning  with  A  would  be  numbered 
II. 

If  accounts  are  active,  the  ledger  sheet  of  two  pages,  front  and  back,  may  be  filled  with 
entries  and  a  new  sheet  may  be  required.  In  such  case  the  filled  sheet  can  be  removed  and  a 
new  sheet  can  be  inserted  in  its  place.  The  sheet  removed  will  be  marked  "Sheet  No.  I,"  and 
the  new  sheet  inserted  will  be  marked  "Sheet  No.  2." 

The  loose  leaf  binder  that  contains  the  open  accounts  is  usually  called  the  Current  Ledger. 
The  closed  accounts  and  those  forwarded  to  new  sheets  are  needed  for  ready  reference,  requir- 
ing another  binder,  usually  called  the  Transfer  Ledger.  The  transfer  ledger  has  index  sheets 
for  self-indexing  the  transferred  accounts,  the  same  as  the  current  ledger. 

The  ability  to  locate  accounts  after  proper  index  sheets  and  to  remove  accounts  from  the 
current  ledger,  makes  the  loose  leaf  ledger  a  great  favorite  with  progressive  accountants. 

The  ledger  account  illustrated  below  represents  the  second  account  title  after  index  sheet 
M,  and  being  marked  sheet  No.  I  indicates  that  the  first  account  sheet  for  this  title  is  still  in 
the  current  ledger.  When  this  sheet  is  filled  and  transferred,  account  sheet  No.  2  will  be 
opened  with  the  same  title. 

The  four  column  ruling  for  ledger  accounts  with  two  columns  for  debit  and  credit  balances, 
is  a  very  convenient  form,  enabling  the  bookkeeper  to  determine  at  a  glance  the  condition  of  the 
account  and  also  giving  data  for  trial  balance  or  monthly  statement. 


SHEET  NO. 


ACCOUNT  NO. 


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Trial  Balance,  Dec.   11,  190. 


Unclosed  Consignments,  Dec.   11,  190. 


Dealers'  Balances,  Dec.   11,   190. 


-13- 


14  HIGHER  ACCOUNTING 


The  General  Ledger. 

The  ordinary  ledger  ruling  is  used  for  the  general  ledger  accounts,  a  full  page  being  as 
signed  to  each  title. 

The  process  of  posting  from  the  different  books  to  the  general  ledger  has  already  been 
explained.  The  general  ledger  and  cash  balance  will  afford  material  at  any  time  for  a  trial 
balance  and  balance  sheet.  A  trial  balance  of  the  dealers'  ledger  will  show  an  excess  of  total 
debits  or  credits  equal  to  the  debit  or  credit  balance  of  Dealers'  Ledger  account  in  the  general 
ledger. 

When  all  consignments  are  closed  and  the  results  are  all  posted,  Consignment  Cash  and 
Consignment  Sales  accounts  in  the  general  ledger  will  be  in  balance.  If  consignments  are  not 
all  closed,  the  two  accounts  above  named  will  probably  not  be  in  balance.  The  account  with 
Consignment  Cash,  if  not  in  balance,  can  be  tested  by  making  a  list  of  cash  charges  on  open 
consignments ;  the  total  of  these  charges  should  be  equal  to  the  debit  balance  of  Consignment 
Cash.  The  account  with  Consignment  Sales,  if  not  in  balance,  can  be  tested  by  making  a  list 
of  sale  amounts  on  open  consignments ;  the  total  of  these  sales  should  be  equal  to  the  credit 
balance  of  Consignment  Sales.  In  making  a  balance  sheet  or  financial  statement,  the  debit  bal- 
ance of  Consignment  Cash  will  be  a  resource  and  the  credit  balance  of  Consignment  Sales  will 
be  a  liability. 


Practice  in  Commission  Bookkeeping. 

Commission  houses  restrict  their  dealings  to  certain  lines  of  merchandise  as  do  other 
houses.  Some  deal  exclusively  in  grain,  others  in  live  stock,  others  in  produce,  others  in 
manufactured  articles.  The  following  memoranda  gives  a  larger  variety  of  consigned  mer- 
chandise than  would  ordinarily  be  handled  by  one  commission  house,  as  the  purpose  is  to  illus- 
trate fully  the  requirements  of  commission  books. 

DECEMBER  10. 

The  Central  Commission  Company  begins  business  today  with  a  cash  capital  of  #5000. 
(Enter  in  cash  book.) 

Paid  for  rent  one  month  #150.      (C.  B.) 

Received  four  consignments  of  merchandise  from  shippers  for  sale  on  their  account  and 
risk  as  itemized  below. 

From  Crescent  Mills,  Akron,  per  B.  C.  R.  R.,  freight  unpaid,  600  sacks  flour  with  instruc- 
tions to  sell  at  not  less  than  #1.55  per  sack. 

(Insert  carbon  and  enter  in  loose  leaf  duplicate  account  sales  blank,  giving  the  consign- 
ment No.  1.) 

From  C.  C.  Smith,  Fairfax,  per  B.  C.  R.  R.,  freight  unpaid,  50  brls.  cranberries.     (Enter 
as  before,  numbering  the  consignment  No.  2.) 
.     From  J.  Lane,  Union  City,  per  Com'l  R.  R.,  freight  unpaid,  1000  doz.  eggs.     (No.  3.) 

From  Barrett  &  Smith,  Oxford,  per  I.  C.  R   R.,  freight  prepaid,  50  boxes  cheese.     (No.  4  ) 

Gave  our  check  to  Excelsior  Transfer  Co.  for  $46  70,  to  pay  freight  and  drayage  on  above 
as  per  railway  and  transfer  line  expense  bills  as  follows  : 

Const.  No.  1  Freight  #18.00  Drayage  #6.00 

"       "     2  "           1390  "           2.10 

"     3  "             3.20  "             .80 

"       "     4  "        prepaid  "            270 

(Enter  the  total  amount  in  cash  book,  consignments  column,  then  turning  to  the  account 
sales  blanks,  insert  carbon  in  each  account  as  before  and  enter  the  charges.) 

Paid  to  the  Exchange  Bank  the  following  sight  drafts  to  apply  on  consignments: 

Drawn  by  C.  C.  Smith,  Const.  No.  2     #100.00 

"    Barrett  &  Smith  "        "    4       125.00 

(Enter  in  cash  book  and  account  sales  blanks  as  charges  were  entered  before.) 

Paid  for  cooperage  on  Const.  No.  2  by  check,  $4.  (Enter  as  before,  on  account  sales 
blank  in  first  space  marked  "other"  charges.) 

One  barrel  of  cranberries  is  found  to  be  unsalable.  (Make  memo  entry  on  account  sales 
No.  2.) 

Bought  of  R.  M.  Gaston,  on  account,  20  brls.  Greening  apples  at  #3.00,  40  brls.  Baldwin 
apples  at  #4.00,  40  brls.  Russet  apples  at  #2.00.     Enter  in  purchase  book.) 

Bought  of  D.  A.  Dille,  on  account,  480  bu.  potatoes  at  30  cts.,  20  brls.  pop  corn  at  #2.50. 

Paid  cash  for  advertising,  #12.50.     (C.  B.  charge  Advertising.) 

Paid  drayage  on  last  two  items  purchased,  $6  00.     (Charge  Merchandise.) 

Took  out  four  insurance  policies,  insuring  any  merchandise  that  may  be  in  warehouse  be- 
longing to  us  or  consigned  to  us  as  follows  : 

#1000  for  one  week  at  a  premium  of  ^  per  cent,  #1000  for  two  weeks  at  a  premium  of  % 
per  cent,  #1000  for  three  weeks  at  a  premium  of  2-5  per  cent,  and  #1000  for  four  weeks  at  a 
premium  of  y^  per  cent.      Gave  our  check  for  the  total  premiums.      (C.  B.  charge   Insurance.) 

Bought  of  P.  Kinney,  on  account,  1200  lbs.  butter  at  22^  cents. 

—15— 


16  HIGHER  ACCOUNTING 


DECEMBER  11. 

Received  six  consignments  of  merchandise  for  sale  on  account  and  risk  cf  shippers  as 
itemized  below. 

From  G.  Kummer,  Waterloo,  per  I.  C.  R.  R.,  450  bu.  gr.  1,  wheat,  freight  prepaid.  (Const. 
No.  5.     Hereafter  number  consignments  as  received.) 

From  T.  S.  Galloway,  Chadron,  per  B.  C.  R.  R.,  700  bu.  gr.  3  oats,  on  which  $18.30 
was  prepaid,  leaving  an  equal  amount  unpaid. 

From  J.  J.  Mellick,  Oakdale,  per  S.  C.  R.  R.,  500  bu.  gr.  2  corn,  freight  charges  collect. 

From  Dennison  &  Caldwell,  Dayton,  per  B.  C.  R.  R.,  375  bu.  gr.  4  rye,  200  bu.  gr.  4  corn, 
freight  collect. 

From  Massey  &  Co.,  Atlantic,  per  S.  C.  R.  R.,  2100  bu.  (3  cars)  gr.  3  oats,  charges  col- 
lect. 

From  Drury  Milling  Co.,  Springdale,  per  B.  C.  R.  R.,  160  brls.  XX  flour,  charges  collect. 

(Open  duplicate  account  sales  sheets  for  each  of  the  above.) 

Paid  the  Corn  Market  Bank  the  following  drafts  drawn  against  above  consignments:  G. 
Kummer  $325.00,  J.  J.  Mellick  $175.00,  Massey  &  Co.,  $600.00.  (One  entry  in  cash  book;  en- 
ter on  each  account  sales  blank.) 

Paid  G.  A.  Dille,  cash  to  apply  on  yesterday's  purchase,  $144.00. 

Paid  R.  A.  Gaston  cash  on  account,  $200.00. 

Received  2000  lbs.  butter,  per  B.  C.  R.  R.,  freight  prepaid,  of  P.  Kinney,  for  which  we 
gave  credit  on  account  at  22  cts.  per  lb. 

Paid  drayage  on  above  merchandise,  $4.00. 

Bought  300  bu.  potatoes  for  cash  at  30  cts.     (Enter  in  cash  book.) 

Sold  L.  Smith,  on  account,  200  sacks  flour  at  $1.60  from  Const.  No.  1,  40  brls.  XX  flour 
at  $7.30  from  Const.  No.  10,  700  lbs.  butter  at  26  cts.  from  merchandise. 

(In  business  bills  would  be  made  out  from  which  entries  in  general  sales  book  would  be 
made.  The  filling  out  of  the  bills  is  to  be  omitted  in  this  set.  Extend  sales  from  the  memo- 
randa to  their  respective  columns  and  enter  the  total  of  the  sales  on  account  in  the  third  column, 
and  cash  totals  in  fourth  column.  Indicate  in  each  line  the  number  of  the  consignment  to 
which  the  item  belongs.) 

Sold  Thomas  Jones,  on  account,  300  bu.  gr.  1  wheat  at  87  cts.  (Const.  5),  500  bu.  gr.  2 
corn  at  45  cts.  (Const.  7) .     (Enter  as  before.) 

Sold  James  Duncan  for  cash,  the  remainder  of  Const.  No.  5,  at  87  cts.  per  bu.  and  all  corn 
in  Const.  No.  8  at  41  cts.  per  bu. 

Sold  W.  B.  Garver,  on  account,  1200  lbs.  butter  at  25  cts.  (Mdse.),  200  sks.  flour  at 
$1.62  (Const.  1),  20  bxs.  cheese,  980  lbs.,  at  11  cts.  (Const.  4). 

Sold  Thomas  Jones,  on  account,  700  bu.  gr.  3  oats  at  40  cts.  (Const.  6),  375  bu  gr.  4  rye 
at  50  cts.  (Const.  8). 

Sold  C.  A.  Curtis,  on  account,  200  sks.  flour  at  $1.62  (Const.  1),  800  lbs.  butter  at  25  cts. 
(Mdse.),  100  brls.  apples  at  $3.00  (Mdse.). 

Made  sundry  cash  sales:  16  brls.  cranberries  at  $6.05  (Const.  2),  5  brls.  cranberries  at 
$6  (Const.  2),  600  doz.  eggs  at  24  cts.  (Const.  3),  8  brls.  cranberries  at  $5.90  (Const.  2),  1400 
bu.  oats  at  40  cts.  (Const.  9),  20  brls.  cranberries  at  $5.22  (Const.  2). 

The  Excelsior  Transfer  Co.  present  bill  for  the  day's  freight  and  drayage  for  $267.04  dis- 
tributed as  follows: 

G.  Kummer  s  Const.  Freigh 

T.  S.  Galloway's  Const.  " 

J.  J.  Mellick's  Const. 

Dennison  &  Caldwell's  Const.  " 

Massey  &  Co.'s  Const.  " 

Drury  Milling  Co.'s  Const.  " 

Drayage  on  Sundry  Merchandise 
Enter  the  total  of  above  items  in  consignments  column  with  exception  of  last  item,  which 
charge  to  merchandise. 

Paid  inspection  charges  $8.00 — one  dollar  for  each  consignment  in  last  lot  except  Massey 
&  Co.'s,  for  which  $3.00  are  entered.  (Cash  book  and  account  sales  sheets  as  other  cash 
charges.) 


-epaid 

Drayage  $5.40 

18.30 

it 

4.48 

28.00 

a 

5.60 

46.50 

n 

6.44 

88.80 

<< 

1344 

36.29 

<( 

6.40 
7-39 

COMMISSION  17 


Received  cash  from  L.  Smith,  on  account,  $500.00,  and  from  Thomas  Jones  in  payment 
of  his  first  purchase  $486.00. 

Post  all  consignment  sales  from  the  general  sales  book  to  the  account  sales  blanks,  using 
care  to  check  each  item  as  posted. 

On  examination  of  account  sales,  six  consignments  are  found  to  be  sold  out,  and  ready  to 
be  closed.  Enter  Storage  at  ^  amount  charged  for  drayage,  Insurance  }&  of  one  per  cent  of 
gross  sale,  and  Commission  at  2^  per  cent  of  gross  sale,  and  determine  the  net  proceeds.  In- 
dicate on  the  account  sales  sheet  that  credit  is  to  be  given  for  the  proceeds  of  any  upon  which 
sight  drafts  have  been  drawn  and  cash  is  to  be  remitted  for  the  proceeds  of  all  others. 

Remove  the  closed  account  sales  from  binder.  The  originals  are  to  be  passed  to  outgoing 
mail  accompanied  by  checks  if  proceeds  require  remittance.  Make  cash  book  entry  for  the 
checks. 

From  the  duplicates  enter  the  items  in  the  appropriate  columns  of  the  account  sales  regis- 
ter and  place  the  duplicates  in  the  transfer  binder.  If  all  the  items  are  entered  correctly  and 
the  computations  are  correct,  the  total  sales  column  should  equal  the  totals  of  the  other 
columns. 

A  trial  balance  is  now  to  be  taken. 

Total  the  footings  of  the  five  columns  headed  Cash  Book  Entries  of  the  register  in  the  last 
column  as  shown  in  model.  Foot  and  rule  the  account  sales  register  shewing  it  to  be  in 
balance. 

Total  the  special  column  in  cash  book  and  balance  the  book  as  shown  in  model. 

Group  all  merchandise  debits  for  posting  by  carrying  the  items  found  in  cash  book  to  the 
purchase  book,  and  closing  the  purchase  book  for  posting,  as  shown  in  model. 

Rule  the  general  sales  book  columns,  showing  debits  to  cash  and  dealers,  and  credits  to 
consignments  and  merchandise  as  shown  in  model. 

The  posting  to  general  ledger  may  now  be  done.  Give  each  account  five  lines.  Post 
from  general  columns  of  cash  book,  purchase  book,  sales  book,  and  account  sales  register. 

Take  a  list  of  the  balances  of  unclosed  consignments,  which  compare  with  the  balances  of 
Consignment  Cash  and  Consignment  Sales  accounts  in  the  general  ledger. 

Post  from  purchase  book,  sales  book,  account  sales  register  and  cash  book  to  the  dealers' 
ledger. 

Take  a  list  of  the  balances  there  found  and  compare  it  with  dealers'  account  in  the  general 
ledger. 

DECEMBER  12. 

Paid  cash  for  advertising,  $22.50. 

Received  for  consignments  as  listed  below: 

From  Dollman  &  Co.,  Summitt  Harbor,  per  B.  C.  R.  R  ,  125  bunches  bananas,  75  bxs. 
oranges. 

From  Medford  &  Coleman,  Batavia,  per  I.  C.  R.  R.,  70  brls.  apples. 

From  Ives  &  Beaman,  St.  Charles,  per  Com'l.  R.  R.,  20  sks.  Eng.  walnuts,  20  sks. 
filberts. 

From  Iowa  Canning  Co.,  Waterloo,  per  B.  C.  R.  R.,  200  cases  canned  corn. 

Gave  check  to  Excelsior  Transfer  Co.,  to  pay  freight  and  drayage  as  per  items  below: 
Const.  Dollman  &  Co., 
"       Medford  &  Coleman 
"       Ives  &  Beaman 
"       Iowa  Canning  Co., 

(Enter  as  usual.) 

Charged  for  repairing  cases  Iowa  Canning  Co.,  Const.  No.  14,  $1.50.  (This  is  not  a  cash 
outlay.  Enter  in  account  sales  blank,  opposite  "other"  charges  to  be  carried  to  ledger  just 
above  total  charges.  The  charges  on  account  sales  blank  are  divided,  the  first  four  represent- 
ing credits  on  cash  book,  and  the  last  four  credits  to  be  posted  through  the  register  to  the 
ledger.) 

Paid  to  Exchange  Bank  for  sight  drafts  on  consignments,  as  follows:  Iowa  Canning  Co. 
$20000;  Ives  &  Beaman  $150.00. 


Freight  $29.00 

Drayage  $2.20 

629 

1.80 

15.80 

1.25 

"          12.69 

3.40 

18  HIGHER  ACCOUNTING 


Made  the  following  sales  of  merchandise  in  stock  and  consignment  goods : 

W.  K.  Duncan,  on  account,  300  doz.  eggs  at  25  cts.  (Const.  3),  20  bxs.  oranges  at  #3.40 
(Const,  n),  50  cases  canned  corn  at  #1.50  (Const.  14),  100  lbs.  butter  at  26  cts.  ( Mdse.) 

James  McDougall,  for  cash,  700  bu.  oats  at  41  cts.  (Const.  9). 

L.  Smith  on  acct.,  25  brls.  XX  flour  at  #7.25  (Const.  10),  100  cases  canned  corn  at  $1.45 
(Const.  14). 

Thomas  Jones,  on  account,  50  cases  canned  corn  at  #1.48  (Const.  14),  15  bxs.  cheese,  800 
lbs.  at  11  cts.  (Const.  4),  100  doz.  eggs  at  25  cts.  (Const.  3),  25  bunches  bananas  at  90  cts. 
(Const.  11),  30  brls.  apples  at  #2.75  (Const.  12),  10  brls.  Russet  apples  at  $3.00  (Mdse.) 

Sundry  cash  sales :    . 

15  brls.  apples  at  $3.00  (Mdse.),  10  bxs.  cheese,  400  lbs.  at  11  cts.  (Const.  4),  15  sks.  fil- 
berts at  #12.00  (Const.  13),  40  brls.  apples  at  #2.60  (Const.  12),  5  bxs.  cheese,  200  lbs.  at  11 
cts.  (Const.  4),  100  bunches  bananas  at  95  cts.  (Const.  11),  20  bxs.  oranges  at  #3.25  (Const, 
n),  5  sks.  filberts  at  #12.40  (Const.  13),  200  bu.  potatoes  at  60  cts.  (Mdse.),  1  sk.  Eng.  walnuts 
at  $11.30  (Const.  13). 

After  transferring  the  cash  sales  to  cash  book,  enter  the  consignment  sales  in  the  respect- 
ive account  sales  sheet. 

Paid  the  following  dealers  cash  on  account:  G.  A.  Dille,  $50.00;  R.  M.  Gaston,  $100.00; 
P.  Kinney,  #270.00. 

Received  cash  from  the  following  dealers  on  account:  C.  A.  Curtis,  $412.00;  W.  B.  Gar- 
ber,  $731.80;  Thomas  Jones,  $200.00;  L.  Smith,  #294.00. 

Paid  sundry  items  of  general  expense,  $3  26. 

Close  all  consignments  found  to  be  sold  out,  five  in  number,  computing  storage,  insurance, 
and  commission  as  previously.  If  cash  has  been  advanced  on  any  of  the  consignments  closed, 
place  net  proceeds  to  credit  of  consignor,  otherwise  remit  for  proceeds. 

Having  entered  checks  in  cash  book  for  such  as  require  remittances  and  passed  all  origi- 
nal account  sales  to  outgoing  mail,  transfer  items  of  account  sales  from  the  duplicates  to  the 
account  sales  register ;  the  duplicates  are  then  to  be  placed  in  the  transfer  binder. 

Post  all  dealers'  entries. 

DECEMBER  15. 

Received  the  following  consignments  to  be  entered  and  numbered  consecutively,  beginning 
with  No.  15. 

John  Babcock,  Taylor  Valley,  per  D.  R.  R.  R.,  80  brls.  pop  corn. 

Medford  &  Coleman,  Batavia,  per  I.  C.  R.  R.,  20  brls.  pop  corn. 

Iowa  Canning  Co.,  Waterloo,  per  B.  C.  R.  R.,  100  cs.  canned  tomatoes,  100  cs.  canned 
corn. 

Massey  &  Co.,  Atlantic,  per  S.  C.  R.  R.,  1600  bu.  gr.  1  wheat,  3  cars. 

T.   S.  Galloway,  Chadron,  per  B.  C.  R.  R.,  1400  bu.  gr.  3  oats,  2  cars. 

J.  J.  Mellick,  Oakdale,  per  F.  E.  &  M.  V.  R.  R.,  2000  bu.  gr.  2  corn,  3  cars. 

Paid  by  check  the  following  sight  drafts  drawn  against  above  consignments  :  Iowa  Can- 
ning Co.,  $250.00;  Massey  &  Co.,  $1250.00;  J.  J.  Mellick,  $750.00. 

Paid  the  following  charges  on  above  consignments  by  check : 
No.  15,  Freight  $13.1 1  Drayage  $4.50 

4.69  "  1.1 3 


16, 

18, 

19. 
20, 
Paid  Sundry  items  o 


12.69  "  3  40 

144.OO  "  Inspection  $3.00 

76.80  "  "  2.00 

168.00  "  "  3.00 

expense,  $39.60. 


Made  the  following  sales  : 

Thomas  Jones,  on  account,  1600  bu.  gr.  1  wheat  at  87  cts  (Const.  18),  2000  bu.  gr.  2 
corn  at  45  cts.  (Const.  20). 

L.  Smith,  on  account,  5  brls.  XX  flour  at  $7.20  (Const.  10),  1  brl.  pop  corn  at  #4.00 
(Const.  16),  8  brls.  pop  corn  at  #4.50  (Const.  15),  5  brls.  apples  at  #3.00  (Mdse.) 

W.  K.  Duncan,  on  account,  50  cs.  canned  tomatoes  at  #2.60  (Const.  17),  2  brls.  pop  corn 
at  $4.00  (Const.   16),    3   sks.  Eng.  walnuts  at  #10.50  (Const.  13),  50  brls.  XX  flour  at  #7.15 


COMMISSION  19 


(Const.  10),  ioo  lbs.  butter  at  26  cents  (Mdse.),  5  bxs.  oranges  at  $3.45  (Const.  11),  80  bu. 
potatoes  at  40  cts.  (Mdse.) 

Cash  Sales:  700  bu.  gr.  3  oats  40  cts.  (Const.  19),  30  brls.  XX  flour  at  $7.10 (Const.  10), 
30  bxs.  oranges  at  #3  30  (Const.  1 1),  10  brls.  pop  corn  at  #4.50  (Const.  15) ,  6  brls.  pop  corn 
at  $4.50  (Const.  15),  2  brls.  pop  corn  at  #3.90  (Const.  16),  25  cs.  canned  tomatoes  at  $2.60 
(Const.  17),  10  brls.  XX  flour  at  #7.05  (Const.  10),  700  bu.  No.  3  oats  at  40  cts.  (Const.  19), 
56  brls.  pop  corn  at  #4.20  (Const.  15),  16  sks.  Eng.  walnuts  at  $10.50  (Const.  13). 

Make  appropriate  entries  for  these  sales  in  the  general  sales  book,  transferring  the  items  to 
the  account  sales  sheets.  Add  $2.00  charge  each  on  consignments  11,  13,  [5,  and  $6.00  on 
No.  10  for  guaranty  of  payment. 

Compute  the  storage,  insurance  and  commission  on  consignments  that  are  sold  out,  mak- 
ing no  storage  charges  on  Nos.  18,  19  and  20,  and  make  entries  for  credit  or  remittance  when 
proceeds  are  reported,  as  previously  directed. 

It  will  be  found  that  one  or  more  of  the  account  sales  have  debits  greater  than  the  amount 
of  sales.  The  debit  balance  should  be  entered  in  the  final  column  in  red  ink,  indicating  that 
the  amount  is  to  be  placed  to  the  debit  of  the  dealer.  To  balance  the  register,  deduct  the  total 
red  or  debit  balances  from  the  total  black  or  credit  balances. 

The  books  may  now  be  balanced  as  on  Dec.  1 1,  taking  a  trial  balance  and  lists  of  the  un- 
closed consignments,  and  of  the  accounts  in  the  dealers'  ledger.  In  posting  the  columns  in  the 
ledger,  the  division  of  register  headed  "other"  charges  is  to  be  posted  to  Sundry  Charges  ac- 
count in  ledger. 

DECEMBER  16. 

Receive  three  consignments  of  merchandise  for  sale  on  account  and  risk  of  shippers,  as 
itemized  below: 

Drury  Milling  Co.,  Springdale,  per  B.  C.  R.  R.,  100  brls.  Crescent  flour. 

Dollman  &  Co.,  Summit  Harbor,  per  B.  C.  R.  R.,  500  bunch,  bananas,  200  bxs.  lemons. 

West  Plaines  Canning  Co.,  West  Plaines,  per  I.  C.  R.  R.,  60  cases  canned  apples,  60  cases 
canned  peaches. 

Received  from  R.  M.  Gaston  bill  for  120  brls.  mixed  apples  at  $2.70  per  barrel,  shipped  by 
him  last  week  from  an  inland  point.     (Credit  on  purchase  book.) 

Bought  of  P.  Kinney  on  account,  20  bxs.  cheese,  800  lbs.,  at  9  cts. 

Received  cash  from  W.  K.  Duncan,  on  acc't.,  $300.00. 

Received  cash  from  Thomas  Jones,  on  acc't.,  $200.00. 

Paid  freight  and  drayage : 

Const.  21,  Freight  $18.40,  Drayage  $5.10 

22,        "         42.60,         "  5.80 

"       23,        "  11.60,         "  3.20 

Paid  for  sundry  expenses,  $32.21 

Paid  freight  and  drayage  charges  on  apples  purchased,  $29.30. 

Post  dealers'  accounts. 

DECEMBER.  18. 

Sold  Thomas  Jones,  on  account,  3  brls.  Crescent  flour  at  $6.60  (Const.  21),  10  bxs.  lemons 
at  $2.65  (Const.  22),  1  brl.  pop  corn  at  $4.05  (Const:  16),  20  lbs.  butter  at  27  cts.  (Mdse). 

Sold  L.  Smith,  on  account,  20  cs.  canned  apples  at  $2.00  (Const.  23),  5  brls.  Crescent  flour 
at  $6.60  (Const.  21). 

Sold  W.  K.  Duncan,  on  acct,  5  bxs.  cheese,  200  lbs.,  at  n}4  cts.  (Mdse.),  100  lbs.  butter 
at  27  cts.  (Mdse.),  10  bunch,  bananas  at  98  cts.  (Const.  22). 

Sold  to  W.  B.  Garver,  on  acct.,  50  cs.  corn  at  $2.25  (Const.  17),  20  bxs.  lemons  at  $2.60 
(Const.  22). 

Made  sundry  cash  sales : 

200  bu.  potatoes  at  50  cts.  (Mdse.),  100  bunch,  bananas  at  96  cts.  (Const.  22),  30  cs. 
peaches  at  $2.15  (Const.  23). 

Paid  cash  for  drayage  on  Mdse.,  $3.20. 

Post  to  account  sales  sheets  and  dealers'  ledger. 


20  HIGHER  ACCOUNTING 


DECEMBER  19. 

Massey  &  Co.  have  drawn  sight  draft  for  balance  of  their  account  which  we  have  paid  by 
check — (C.  B.  Dealers'  column). 

Paid  P.  Kinney  cash  on  account,  $300.00. 
"  R.  M.  Gaston  "     "         "  250.00. 

Received  cash  from  C.  A.  Curtis  on  account,  $   112.00. 
"  "         "     Thomas  Jones "         "  2000.00. 

"     L.  Smith  "         "         balance  due. 

"     W.K.  Duncan "         "         $   106.05. 
Paid  cash  for  merchandise  bought  as  per  sundry  bills,  $296.80. 
Paid  freight  and  drayage  on  merchandise,  $6.29. 
Post  dealers'  accounts. 

DECEMBER  22. 

Received  a  consignment  of  1800  bu.  gr.  2  corn,  2  cars,  from  J.  J.  Mellick,  Oakdale,  per  S. 
C.  R.  R.,  on  which  we  paid  freight  $58.76  and  inspection  charges  $2.00.  Also  paid  his  sight 
draft  drawn  against  same  for  $250.00. 

Sold  Thomas  Jones,  on  acet,  J.  J.  Mellick's  entire  consignment  No.  24  at  45  cts.  per  bu. 

Close  Const.  No.  24,  making  usual  insurance  and  commission  charges,  and  passing  pro- 
ceeds to  credit  of  consignor.     Post  dealers'  accounts. 

DECEMBER  23. 

Sold  Crissman  &  Co.,  for  cash,  all  bananas  remaining  of  Const.  22,  with  exception  of  seven 
bunches  which  are  unsalable,  at  92  cts.  Also  the  170  boxes  lemons  remaining  of  same  Const, 
at  $2.48. 

Close  Const.  22  with  usual  storage,  insurance,  and  commission  charges,  remitting  cash  for 
proceeds. 

DECEMBER  24. 

Sold  W.  B.  Garver,  on  acct.,  14  brls.  pop  corn  at  $4.00  (Const.  16),  25  cs.  tomatoes  at 
$2.60  (Const.  17),  50  brls.  Crescent  flour  at  $6.55  (Const.  21). 

Sold  W.  K.  Duncan,  on  acct.,  30  cs.  peaches  at  $2.15  (Const.  23),  10  cs.  apples  at  $2.10 
(Const.  23),  20  cs.  corn  at  $2.25  (Const.  17),  8  brls.  Crescent  flour  at  $6.55  (Const.  21). 

Sold  L.  Smith,  on  acct.,  15  cs.  apples  at  $2.10  (Const.  23),  30  brls.  Cres.  flour  at  $6.55 
(Const.  21),  100  lbs.  butter  at  28  cts.  (Mdse.) 

Made  sundry  cash  sales : 

4  brls.  Cres.  flour  at  $6.55  (Const.  21),  30  cs.  corn  at  $2.25  (Const.  17),  15  cs.  apples  at 
$2.15  (Const.  23). 

Close  sold-out  consignments  and  remit  proceeds  for  all,  except  la.  Canning  Co's.  which 
credit,  making  usual  storage,  insurance,  and  commission  charges. 

Post  dealers'  accounts. 

DECEMBER  31. 

Remitted  checks  for  balance  of  consignors'  accounts  found  on  dealers'  ledger,  six  in 
number. 

Collected  cash  of  W.  K.  Duncan  and  Thomas  Jones  for  balances  due. 

Post  books  and  take  trial  balance.  Remember  to  transfer  merchandise  items  from  the  cash 
book  to  the  purchase  book  before  posting.  See  that  the  accounts,  consignment  cash,  and  con- 
signment sales  are  in  balance. 

Close  the  books,  carrying  the  gain  or  loss  from  seven  accounts.  Two  inventories  are 
taken : 

Merchandise  on  hand  valued  at  $210.00. 

Expense  prepaid  estimated  at  $145.00. 

Open  an  account  with  undivided  profits  to  which  the  net  gain  is  to  be  carried  from  Loss 
and  Gain  account. 

Take  a  trial  baiance  of  the  general  ledger  after  closing. 


COMMISSION  21 


Questions  on  Commission  Accounting. 

i.  How  does  the  commission  business  differ  from  ordinary  merchandising? 

2.  Define  shipments  ;  consignments. 

3.  What  kinds  of  merchandise  are  most  largely  handled  by  commission  houses? 

4.  What  is  an  invoice  of  shipment  ? 

5.  What  is  an  account  sales? 

6.  What  is  the  difference  between  net  proceeds  and  gross  proceeds  ? 

7.  From  what  sources  does  the  commission  merchant  derive  his  profits? 

8.  What  is  a  receiving  book,  and  how  is  it  used? 

9.  What  is  a  commission  sales  ledger,  and  how  is  it  used? 

10.  Describe  the  loose  leaf  account  sales  and  tell  how  it  is  used. 

11.  Describe  the  commission  general  sales  book  and  tell  how  it  is  used. 

12.  Describe  the  purchase  book;  the  cash  book ;  the  account  sales  register. 

13.  Describe  the  loose  leaf  ledger. 

14.  Describe  the  four  column  ledger  ruling. 

15.  Why  are  the  sheet  number  and  the  account  number  both  given  in  loose  leaf  ledger 
sheets  ? 

16.  What  purpose  is  served  by  transferring  cash  purchases  of  merchandise  from  the  cash 
book  to  the  purchase  book? 

17.  What  ledger  accounts  in  this  set  pertain  especially  to  the  commission  business? 

18.  Explain  the  following  accounts:     Advertising,  storage,  insurance,  commission,  con- 
signment cash,  consignment  sales. 

19.  How  is  the  list  of  charges  and  credits  of  unclosed  consignments  shown  to  be  correct? 

20.  How  is  the  list  of  balances  in  dealers'  ledger  proven? 

21.  What  accounts  in  the  general  ledger  show  losses  or  gains  ? 


22 


HIGHER  ACCOUNTING 


Real  E,state  Titles. 


Keeping  records  of  real  estate  transfers  and  ownership  is  a  subject  that  properly  claims 
more  space  than  we  can  give  in  a  short  chapter.  We  will  only  outline  briefly  the  methods 
used  for  describing  and  locating  land  and  town  lots  and  the  method  of  keeping  records  of  all 
transfers  and  of  showing  the  ownership  of  every  piece  of  real  estate. 

Land  and  Town  Lots. 

Real  Estate,  either  in  land  or  town  lots,  is  divided  into  parts  by  boundary  lines.  The 
acre  is  the  unit  of  land  measure.  Government  lands  are  generally  surveyed  into  rectangular 
tracts,  the  boundary  lines  conforming  to  the  cardinal  points. 

A  base  line  is  a  starting  line  running  east  and  west,  from  which  parallel  lines  6  miles  apart 
are  run. 


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No.  1. 
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REAL  ESTATE  TITLES  23 


A  principal  meridian  is  a  starting  line  running  north  and  south,  from  which  other  merid- 
ians 6  miles  apart  are  run. 

A  Township  is  a  tract  of  land  6  miles  square,  formed  by  the  intersections  of  parallels  and 
meridians.  It  is  divided  into  36  equal  square  parts.  Townships  are  numbered  1,  2,  3,  4,  etc., 
north  or  south  of  the  base  line. 

A  section  is  one-thirty-sixth  of  a  township.  Sections  are  subdivided  into  half-sections, 
quarter-sections,  half- quarter-sections,  quarter-quarter-sections,  and  lots. 

A  lot  is  an  irregular  tract  of  land,  also  a  descriptive  term  of  city  property. 

A  range  is  a  tier  of  townships  extending  north  or  south  from  a  base  line.  Ranges  are 
designated  as  Range  1,  2,  3,  4,  etc.,  east  or  west  of  a  principal  meridian. 

A  correction  line  is  a  secondary  base  line  used  to  correct  the  width  of  townships  and  sec- 
tions that  grow  narrower  as  we  go  north,  on  account  of  the  converging  of  all  meridians  towards 
a  common  point. 

Since  1 802,  the  United  States  surveyors  have  followed  the  above  plan  in  laying  out  tracts 
of  land,  and  all  states  having  land  surveyed  by  the  government  since  that  date  use  a  very  brief 
method  of  describing  and  locating  land. 

In  the  states  whose  land  was  surveyed  previous  to  1802,  the  description  of  tracts  of  land 
refer  to  natural  objects  near  by ;  such  as,  a  certain  tree,  or  boulder,  or  pond  of  water,  or  an 
established  road. 

Forty  acres  of  land  in  the  regular  survey  would  be  described  as  follows : 

The,  North  East  Quarter  (N.  E.  %)  of  the  North  West  Quarter  (N.  W.  %)  of  Section 
twenty-one  (S.  21),  Township  thirty-five  north  (T.  35  N.),  Range  fifteen  (R.  15)  East  of  the 
Third  Principal  Meridian. 

Diagram  No.  1  shows  a  township  and  its  division  into  sections,  and  the  method  of  num- 
bering the  same. 

Diagram  No.  2  shows  a  division  of  a  section  and  the  method  of  describing  the  same. 

Diagram  No.  3  shows  the  base  line  and  principal  meridian,  ranges  of  townships,  and  set 
off  of  meridian  on  correction  line. 

A  town  site  is  usually  divided  into  blocks  of  uniform  size,  separated  by  streets,  and  the 
blocks  being  subdivided  into  lots  of  uniform  size.  In  many  towns  and  cities,  the  block  is  300 
feet  square,  divided  into  ten  lots,  60x140  feet,  five  facing  on  each  street  front  and  back,  with  an 
alley  20  feet  wide  separating  the  two  half  blocks. 

The  lots  are  numbered  in  each  block  from  one  to  ten,  and  the  blocks  are  numbered  from 
one  upwards,  according  to  the  size  of  the  city  plat. 

For  convenience  in  locating  stores,  offices,  and  residences,  each  space  of  twenty  feet  is 
given  a  street  number,  the  odd  numbers,  I,  3,  5,  7,  9,  etc.,  designating  the  business  numbers  on 
the  right  hand  side  of  the  street  or  avenue  going  from  the  starting  point  in  the  business  center, 
and  the  even  numbers,  2,  4,  6,  8,  10,  etc.,  designating  the  business  numbers  on  the  left  hand 
side  of  the  street  or  avenue. 

For  convenience  in  estimating  distances  and  street  locations,  many  towns  are  using  what 
is  generally  known  as  "the  Philadelphia  plan,"  which  allows  one  hundred  numbers  to  the  block, 
so  that  the  hundreds  of  the  numbers  locate  the  intersections  of  streets  and  avenues. 

In  our  plat  of  College  City  we  have  followed  this  plan  of  business  numbers.  It  will  be 
seen  that  the  business  numbers  in  the  first  block  above  South  Front  Street,  count  the  odd  num- 
bers from  1  to  29  on  the  right,  and  from  2  to  30  on  the  left.  After  crossing  First  Street  the 
numbers  run  from  101  to  129  and  r 02  to  130,  respectively,  and  afcer  crossing  Second  Street 
they  run  from  201  to  229  and  from  202  to  230,  and  so  on  as  far  northward  as  the  lots  are 
numbered  on  the  avenues. 

Above  Sixth  Street  the  business  lots  front  on  the  streets  and  the  business  numbers  begin 
at  Western  Avenue  and  count  eastward  in  the  same  manner. 

It  will  be  seen  by  referring  to  any  block  in  the  city  plat,  that  a  lot  fronting  sixty  feet  on 
any  street  or  avenue,  is  divided  into  three  business  lots  of  twenty  feet  each.  These  business 
lots  can  be  designated  as  the  North  ^,  Center  }£,  or  South  ^,  of  a  given  lot,  or  the  East, 
Center,  or  West  y^t  depending  upon  the  points  of  the  compass.  As  ah  illustration,  Business 
Lot  No.  201,  Third  Avenue,  can  also  be  described  as  South  %  (or  20  ft.)  of  Lot  1,  Block  t6. 


24 


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C. 


RAILWAY 


26 


HIGHER  ACCOUNTING 


Folio  2 

Daily  Register 

of 

Date  Filed 

Line 

GRANTOR 

GRANTEE 

Kind  of 
Instrument 

Considera- 

Date  of  Instrument 

Year 

Month 

Day 

Year 

Month 

Day 

1900 

Feb. 

1 

1 

United  States 

B.  C.  Railway 

Grant 

1900 

Jan. 

1 

1901 

Mar. 

1 

2 

B.  C.  Railway- 

College  Invest.  Co. 

War.  Deed 

12,000 

1901 

Feb. 

28 

1902 

Mar. 

1 

3 

College  Invest.  Co. 

Asa  R.  Andrews... 

War.  Deed  ... 

10,000 

1902 

Feb. 

20 

1902 

June 

15 

4 

College  Invest.  Co. 

Carl  C.  Barton 

War.  Deed 

12,000 

1902 

June 

12 

1902 

July 

20 

5 

College  Invest.  Co. 

Martin   V.  Bernis.. 

War.  Deed 

15,000 

1902 

July 

18 

1902 

Sept. 

15 

6 

College  Invest.  Co 

George  C.  Buckley 

War.  Deed 

17,500 

1902 

Sept. 

14 

1902 

Nov. 

12 

7 

College  Invest.  Co. 

Arthur  M.  Butler.  _ 

War.  Deed 

18,000 

1902 

Nov. 

10 

1903 

Jan. 

5 

8 

College  Invest.  Co. 

Andrew  V.  Cornish 

War.  Deed 

20,000 

1903 

Jan. 

4 

1903 

Feb. 

21 

9 

College  Invest.  Co. 

Edward  E.  Drew.. 

War.  Deed 

20,000 

1903 

Feb. 

20 

1903 

May 

13 

10 

College  Invest.  Co. 

Austin  R.  Edwards 

War.  Deed 

21,000 

1903 

May 

12 

1903 

July 

2 

11 

College  Invest.  Co. 

John  G.  French... 

War.  Deed 

22,500 

1903 

July 

1 

1903 

Nov. 

21 

12 

College  Invest.  Co. 

Orton  E.  Grant 

War.  Deed 

23,000 

1903 

Nov. 

20 

1904 

Jan. 

22 

13 

College  Invest.  Co. 

Roger  R.  Hartman. 

War.  Deed 

20.500 

1904 

Jan. 

20 

1904 

July 

16 

14 

College  Invest.  Co. 

Charles  R.  Morton. 

War.  Deed 

19,500 

... 

1904 

July 

15 

1906 

Jan. 

8 

15 

Asa  R.  Andrews... 

Andrew  A.  Minor. _ 

War.  Deed 

3,000 

1906 

Jan. 

7 

1906 

Jan. 

8 

16 

Andrew  A.  Minor. . 

Asa  R.  Andrews  ... 

Mortgage  . 

2  000 

1906 

Jan. 

7 

1906 

July 
Aug. 

30 

17 

Asa  R.  Andrews.. 

Andrew  A.  Minor.. 

Release  Mortg. 

1906 

July 

?S 

1906 

25 

18 

B.  C.  Railway 

Henry  C.  Preston. _ 

War.  Deed 

3,000 

1906 

Aug. 

24 

1906 

Aug. 

25 

19 

Henry  C.  Preston.. 

B.  C.  Railway 

Mortgage 

2,500 



1906 

Aug. 

24 

1906 

Sept. 

2 

20 

Asa  R.  Andrews... 

John  G.  Lane 

War.  Deed 

1,000 

1906 

Sept. 

1 

1906 

Sept 

15 

21 

Asa  R.  Andrews... 

George  Martin 

War.  Deed 

1,250 

1906 

Sept. 

14 

1906 

Sept. 

15 

22 

George   Martin 

Aas  R.  Andrews... 

Mortgage 

1,000 

._. 

1906 

Sept. 

14 

1907 

Jan. 

15 

23 

B.  C.  Railway 

Henry  C.  Preston. . 

Release  Mortg. 

2,500 



1907 

Jan. 

14 

1907 

Jan. 

22 

24 

Henry  C.  Preston.. 

College  Invest.  Co. 

War.  Deed 

2,000 



1907 

Jan. 

21 

1907 

Jan. 

25 

25 

Loomis  Bros. 

Mechanic's  L'n 

500 

... 

1907 

Jan. 

24 

Town  Lot  Index  to  Transfers. 

Block  No.  34,  College  City. 


2 

2 

2 

2 

2 

N/3 

1 
2 

2 
2 

3 
2 

21 

22 

__ 

1 

>                      CH 

1 
2 

2 
2 

3 
2 

SV3 

1 

2 

3 

2 

2 

2 

2 

2 

N73 

1 

2 

3 

20 

25 

2 

2 

2 

2 

2 

2 

1 

0                     ClA 

1 

2 

3 

15 

16 

17 

sy8 

2 

2 

2 

2 

2 

2 

1 

2 

3 

15 

16 

17 

- 

Township  80  North 
Range  6  West 


Land  Index  to  Register  of  Transfers. 


N.  E.  % 

2 

1 

1 

1 

iH 

S.  E.  % 

2 

2 

2 

2_ 

23 

CI 
V 

1 

18 

19 

to 

S.  W.  % 

2 

2 

2 

2 

2 

1 

18 

19 

23 

24 

n.  w.  y< 

2 

z 

1 

REAL  ESTATE  TITLES 


27 


Real  E,state  Transfers. 

Folio  2 

Where  Recorded    j 

TOWN 

DESCRIPTION 

FOLIO 

Book 

Page 

A 

B 

C 

C 

C 

C 

C 

D 

D 

D 

D 

D 

E 

E 

L 

L 

M 

L 

M 

L 

L 

M 

M 

L 

N 


92 
101 
215 

575 
615 
750 
820 
125 
212 
375 
515 
727 
215 
750 
595 
596 
210 
650 
300 
670 
680 
325 
410 
820 
134 


College  City. 
College  City. 
College  City. 
College  City. 
College  City 
College  City. 
College  City. 
College  City. 
College  City. 
College  City. 
College  City. 
College  City. 
College  City. 
College  City. 
College  City. 


College  City. 
College  City. 
College  City. 


College  City. 


Section  1,  township  80  north'  range  6  west. 

S.  W.  X  section  1,  township  80  north,  range  6  west. 

Blocks  8,  9,  31,34,  35,  48,  original  plat  S.  W.  X>  section  1-80-6. 

Blocks  25,  27,  29,  47,  original  plat  S.  W.  X>  section  1-80-6. 

Blocks  20,  22,  24,  46,  original  plat  S.  W.  X.  section  1-80-6. 

Blocks  13,  15,  17,  45,  original  plat  S.  W.  X>  section  1-80-6. 

Blocks  10,  12,  44,  original  plat  S.  W.  X,  section  1-80  6. 

Blocks  3,  32,  43,  original  plat  S.  W.  X.  section  1-80  6. 

Blocks  30,  33,  36,  37,  original  plat  S.  W.  X.  section  1-80-6. 

Blocks  19,  26,  28,  38,  original  plat  S.  W.  X,  section  1-80-6. 

Blocks  18,  21,  23,  39,  original  plat  S.  W 

Blocks  7,  14,  16,  40,  original  plat  S.  W. 

Blocks  5,  11,  41,  original  plat  S.  W.  X. 

Blocks  2,  4,  42,  original  plat  S.  W. 

S.  %  lot  10,  block  34,  original  plat. 

S.  %  lot  10,  block  34,  original  plat. 

S.  %  lot  10,  block  34,  original  plat. 

S.  X  N.  W.  X-  section  1,  T.  80  N.,  R.  6  west. 

S.  X  N.  W.  X-  section  1,  T.  80  N.,  R.6  west. 

N.  %  lot  10,  block  34,  original  plat. 

N.  y3  lot  9,  block  34,  original  plat. 

N.  %  lot  9,  block  34,  orig  nal  plat. 

S.  X  N.  W.  X.  section  1,  T.  80  N.,  R.  6  west. 

S.  W.  X  N.  W.  X-  section  1,  T.  80  N.,  R.  6  west. 

*N.  %  lot  10,  block  34,  original  plat. 

(♦Balance  due  for  material  and  labor  on  dwelling.) 


/+. 

%, 

X,  section  1  80-6. 
X,  section  1-80-6. 
,  section  1-80  6. 
section  1-80-6. 


Abstract  of  Title. 

S.  2=3  of  Lot  10.  Block  34,  College  City,  any  County  and  State. 


Grantor 


United  States 

B.  C.  Railway 

College  Invest.  Co 

Asa  R.  Andrews ... 
Andrew  A.  Miner . 
Asa  R.  Andrews... 


Grantee 


B.C.  Railway 

College  Invest.  Co 
Asa  R.  Andrews 

Andrew  A.  Minor  . 

Asa  R.  Andrews 

Andrew  A.  Minor . 


Date  of  Inst. 


1900 
1901 
1902 

1906 
1906 
1906 


Jan. 
Feb. 
Feb. 

Jan. 
Jan. 
July 


Date  of  Filing 


1900 
1901 
1902 

1906 
1906 
1906 


Feb. 
Mar. 
Mar. 

Jan. 
Jan. 
July 


Where 
Record^ 


92 
101 
215 

595 
596 
210 


Inst. 


Grant 

War.  Deed 
War.  Deed 

War.  Deed 
Mortgage 
Release... 


REMARKS 


All  of  S.  1,  T.  80  N.,  R.  6  west. 
S.  W.  %,  S.  1,  T.  80  N..  R.  6  west 

Blks.  32.  34.  36,  48,  original  plat 
of  S.  W.  %  S.  1,  T.  80  N.,  R.  6 
west. 

S.  %  lot  10,  blk.  34,  orig.  plat. 

S.  %  lot  10,  blk.  34,  orig.  plat. 
S.  %  lot  10,  blk.  34,  orig.  plat. 


State  of | 

County  J 

After  a  careful  examination  of  the  books  of  the  Recorder  of  Deeds  and  Mortgages,  the  Judgment 
Docket  of  the  Circuit  Court  for  the  past  ten  years,  the  Probate  Records,  Mechanic's  Liens  and  Records  of 
Tax  Sales,  all  of  said  county,  I  find  the  matter  above  noted,  and  none  other  records  that  appear  to  affect 
the  title  of  the  premises  described  above.  The  Student, 

Dated  Aug.  15,  1906.  Abstracter. 


28  HIGHER  ACCOUNTING 


Real  Estate  Transfers. 

All  contracts  relating  to  the  transfer  of  real  estate  are  made  in  writing  and  under  seal,  and 
all  such  contracts  are  placed  on  record,  being  copied  in  full  at  the  recorder's  office  of  the  county 
and  state  in  which  the  property  is  located.  By  selecting  and  grouping  together  from  these  records 
all  of  the  transfers  pertaining  to  a  given  piece  of  property,  we  may  have  a  complete  history  of  the 
ownership  of  that  property.  The  essential  facts  of  such  a  history,  grouped  together  in  a  sys- 
tematic manner,  are  called  an  "Abstract  of  Title." 

An  abstract  of  title  may  be  made  without  consulting  the  recorder's  copies  of  the  various 
transfers,  by  keeping  the  Register  of  Real  Estate  Transfers.  The  transfer  entries  relating  to  a 
given  property  are  readily  found  by  means  of  an  index  book,  which  groups  together  the  num- 
bers of  the  page  and  line  of  the  transfer  book  where  each  entry  is  made  that  relates  to  the 
property.  It  will  be  readily  seen  that  a  correct  abstract  of  title  is  a  very  essential  factor  in  the 
transfer  of  real  estate. 

The  model  transfer  register  on  pages  26  and  27  gives  all  of  the  transfers  pertaining  to  the 
forty-eight  blocks  of  College  City,  and  shows  the  ownership  of  each  block. 

The  model  index  to  transfers  on  page  26  illustrates  the  method  of  grouping  the  transfers 
pertaining  to  a  given  property.  Two  horizontal  lines  are  assigned  to  each  third  of  a  lot,  con- 
stituting a  business  lot  of  twenty  feet.  The  index  book  to  land  transfers  will  have  horizontal 
lines  for  indexing  quarter-quarter  sections  of  40  acres,  and  smaller  divisions  may  be  provided 
for  on  the  same  plan  if  smaller  parcels  of  land  are  transferred. 

The  model  abstract  of  title  on  page  27  gives  all  of  the  records  that  affect  the  title  to  the 
center  one-third  and  the  south  one-third  of  lot  10,  block  34. 

Exercise  in  Making  Abstracts  of  Title. 

The  student  may  make  an  abstract  of  title,  giving  all  transfers  recorded  and  indexed  in 
the  model  forms,  for  each  of  the  following  properties : — 

1.  The  north  third  of  lot  9,  block  34. 

2.  The  north  third  of  lot  10,  block  34. 

3.  The  southeast  quarter  of  the  northwest  quarter  of  section  1,  township  80  north,  range 
6  west. 

4.  The  southwest  quarter  of  the  northwest  quarter  of  section  1,  township  80  north,  range 


west. 


1 

2 

3 
4 
5 
6 

/ 
8 

9 
10 
11 
12 


Questions  on  Real  Estate  Titles  and  Abstracts. 

How  is  land  originally  divided  by  U.  S.  surveyors  ? 

What  is  a  base  line?     A  principal  meridian? 

What  is  a  township  ? 

How  many  sections  in  a  township  ?     How  are  they  numbered  ? 

How  are  parts  of  a  section  described  ? 

How  is  town  or  city  property  described? 

How  are  properties  numbered  for  convenience  in  locating  stores,  residences,  etc.  ? 

What  public  officer  has  charge  of  the  records  showing  the  ownership  of  property  ? 

What  form  of  contract  is  used  in  transferring  real  property  ? 

What  is  an  abstract  of  title  ?     How  made  ? 

Should  an  abstract  of  title  be  made  whenever  real  estate  is  transferred  ? 

Describe  the  books  kept  by  an  abstracter. 


REAL  ESTATE  AND  INSURANCE  29 


Real  Estate  and  Insurance  Accounting. 

The  transactions  and  records  pertaining  to  the  buying,  selling  and  renting  of  real  estate, 
and  the  writing  of  fire  insurance,  belong  to  two  distinct  lines  of  business,  but  in  a  majority  of 
cases,  except  in  the  larger  cities,  these  two  lines  are  combined,  and  a  scheme  of  accounting  is 
required  that  makes  provision  for  both.  The  Card  System  for  keeping  special  records,  side 
ledgers,  and  other  memoranda,  and  Bound  Books  for  the  general  accounts  and  historical  records 
will  be  found  especially  adapted  to  such  a  business. 

Loose  card  records  are  of  special  value  when  such  records  are  to  be  classified  and  when- 
the  classification  changes  with  the  transactions.  Loose  cards  for  ledger  accounts  with  persons 
are  very  convenient,  because  they  can  be  easily  assorted  for  indexing,  and  closed  accounts  can 
be  removed  and  filed  away,  leaving  in  the  current  ledger  only  open  or  live  accounts. 

Card  records  will  be  used  for  recording  and  classifying  properties  for  rent  and  for  sale,  for 
recording  expiration  dates  of  insurance  policies,  and  for  ledger  accounts  with  tenants  and  with 
parties  for  whom  we  rent  and  sell  properties. 

Bound  books  will  be  used  for  policy  register,  cash  journal,  bill  book,  and  general  ledger. 

The  Card  Cabinet. 

The  record  cards  are  kept  most  conveniently  in  a  cabinet  or  box,  with  a  separate  apart- 
ment for  each  variety  of  records  required.  A  cabinet,  like  the  one  illustrated  on  page  30,  with 
six  apartments,  will  be  convenient  for  filing  and  classifying  the  different  cards  required  in  this 
line  of  accounting. 

Apartment  No.  1  contains  the  cards  used  in  recording  properties  for  rent.  The  blank 
cards  are  kept  back  of  the  number  guides.  When  a  property  is  entered  for  rent,  a  record  of 
the  same  is  made  on  one  of  the  renting  cards,  and  the  card  is  filed  back  of  the  guide  card  that 
has  the  same  monthly  rate.  After  a  property  has  been  rented,  the  renting  card  is  removed 
from  the  classified  list  of  properties  for  rent  and  the  card  is  filed  back  of  the  blank  cards  in 
the  same  apartment. 

Apartment  No.  2  contains  cards  for  recording  insurance  policies  issued,  each  card  having 
the  expiration  month  printed  above  the  upper  margin  of  the  card.  -***These  insurance  cards  are 
classified  by  placing  together  all  that  have  the  same  expiration  month,  the  written  cards  being 
placed  in  front  of  the  blank  cards  in  the  same  apartment. 

Apartment  No.  3  contains  ledger  cards  for  accounts  with  tenants.  The  blank  cards  are 
kept  together  back  of  the  alphabetical  guide  cards.  As  soon  as  a  property  is  entered,  a  ledger 
account  with  the  tenant  is  opened  on  one  of  the  cards,  see  page  3 1 ,  after  which  the  account  is 
indexed  by  placing  it  back  of  the  guide  card  corresponding  to  the  initial  letter  of  the  Surname. 
When  a  tenant's  lease  expires  or  is  cancelled  and  his  account  is  balanced,  his  account  card  is 
removed  from  the  current  accounts  in  Apartment  No.  3,  and  is  filed  in  the  same  apartment, 
back  of  the  blank  cards,  making  a  special  division  called  "Transfer  Accounts."  In  a  business 
where  these  transfer  accounts  are  likely  to  be  wanted  again,  another  set  of  alphabetical  guide 
cards  would  be  used  for  indexing  the  transfer  accounts  for  ready  reference. 

Apartment  No.  4  contains  the  cards  used  in  recording  properties  for  sale.  The  blank 
cards  are  kept  back  of  the  number  guides.  When  a  property  is  entered  for  sale,  a  record  of 
the  same  is  made  on  one  of  the  selling  cards,  and  the  card  is  filed  back  of  the  proper  guide 
card.  After  a  property  has  been  sold,  the  selling  card  is  removed  from  the  classified  list,  and 
is  filed  back  of  the  blank  cards  in  the  same  apartment. 

Apartment  No.  5  contains  ledger  cards  for  accounts  with  regular  customers  for  whom  we 
buy  and  sell  and  rent  properties.  These  card  accounts  are  used  as  a  side  ledger,  the  total  of 
the  debits  on  the  several  ledger  cards  being  equal  to  the  debits  of  Customers'  account  in  the 
general  ledger,  and  likewise  the  total  of  the  credits  in  the  ledger  cards  being  equal  to  the 
credits  of  Customers'  account. 

The  blank  cards  are  kept  back  of  the  alphabetical  guides,  and  as  the  accounts  are  opened 
they  are  indexed  as  already  explained  in  Apartment  No.  3.  These  ledger  cards  are  ruled  on 
both  sides,  so  that  the  account  may  be  carried  from  one  side  to  the  other,  filling  both  sides  of 
the  card  before  being  forwarded  to  a  new  card.     The  first  card  assigned  to  a  given  account 


30 


HIGHER  ACCOUNTING 


will  be  marked  No.   i,  the  second  No.  2,  card  No.  1  being  filed  among  the  transfer  cards  after 
No.  2  has  been  opened. 

Apartment  No.  6  has  a  set  of  alphabetical  guides  and  is  used  for  transferring  ledger  cards 
from  Apartment  No.  5,  when  accounts  are  closed  or  when  cards  are  filled  and  the  accounts  are 
forwarded  to  new  cards.  The  transfer  cards  are  indexed  in  Apartment  No.  6  for  convenient 
reference  if  they  should  be  required  at  any  time.  If  a  closed  account  that  has  been  filed  in  the 
transfer  apartment,  is  again  opened,  it  is  taken  from  the  transfer  apartment  and  placed  in  the 
current  accounts. 

Card  Cabinet  for  Record  and  Ledger  Cards. 


Form  1— Model  Renting  Card  (Before  the  Property  Has  Been  Rented) 

RENTING  PROPERTIES 


0    / 


Term 9  $    /    Cs     Per  r"°ntri 


To  Whom  Rented 


Lease  Expires 


Insured  for  how  much  $ 


0  0 


Insured  In  what  Company 


cJLt^^L-^^     sj^t-**—^. 


Insurance  Expires 


-JbJ!L,  <r  /  #<,  / 


REAL  ESTATE  AND  INSURANCE 


31 


These  cards  should  be  filed  in  the  renting  apartment  of  the  cabinet,  according  to  the  in- 
structions for  Apartment  No.  I. 

The  real  estate  agent,  by  turning  to  his  guide  cards  in  the  renting  apartment,  can  readily- 
select  the  required  property  and  complete  the  memoranda  of  the  renting  card.  The  two  lines 
"To  Whom  Rented"  and  ''Lease  Expires"  should  be  written  with  light  pencil  lines,  so  that  they 
may  be  erased  when  the  tenant  gives  up  the  property,  at  which  time  the  card  with  only  the 
pen  written  memoranda  will  be  filed  again  in  the  renting  apartment. 

Form  2— Model  Renting  Card  (After  the  Property  Has  Been  Rented). 

RENTING  PROPERTIES 


Terms  $    /     (y 


per  month 


To  Whom   Rented 


Lease  Expires 


-Jt-tx^L,     \JZ    /fa   £ 


Insured  for  how   much   $ 


l/V 


Insured  in   what  Company 


Insurance   Expires 


lf-^^Y 


\d^^L-.    (£+=?< 


'  <? 


*L 


The  card  account  with  a  tenant  is  merely  a  memorandum  account  to  show  amount  of 
rent,  when  due,  and  when  paid.  The  rent  is  charged  when  it  becomes  due  by  contract,  and 
the  payment  is  credited  as  soon  as  it  is  received,  without  reference  to  the  cash  book  entry. 
As  these  are  merely  memorandum  entries,  they  do  not  affect  the  general  balances. 

Form  3— Model  Tenants'  Ledger  Card. 


j<^7(rj^^^. 


JS £k*JL± 


™      Qy~.s.r-    <»t>    T0  JL.  A.   c    dc  4ggg  ^-~   -^  - ^ 


fatty 


/S^t^-^i  £eJ 


*£L 


^JZ_ 


..    /£&£*.  j- 

<Lm. 


/  o 

/  o 

/  n 

/  o 

/  o 

/  O 


JL 


e^^JL; 


/  o 


32 


HIGHER  ACCOUNTING 


Properties  For  Sale. 

Properties  for  sale  should  be  described  on  the  selling  cards,  which  for  convenience  in  the 
office  practice  should  be  filed  in  Apartment  No.  4.     See  page  29. 

The  blank  selling  cards  are  arranged  for  either  residence  or  business  properties  and  all 
descriptive  parts  that  do  not  apply  to  the  given  property  should  be  left  blank. 


Form  4— Model  Selling  Card. 

No.  and  St.*->*V  2.—  *J~~&  *S     -Z*^L-e— »<--«>/'      ^L^tA^C^  Bet 


Date 


~^%  v;    6~£Zu  -*££&. 


Price  $ 


•&    0    0   0  


>^-  yGZ-c-c^^-^-a^^^assession 


'Fronts  J-Z'tf 


s* 


Kind  of  Bldg 


v>£w^  ^JC*-*-*/ 


f^rts  yN0j_Rc 


^ 


Size  of  Bldg.  J2  ^>    x  /.loft.     Cost  $.2  o  g>  o  —     in  19*?/  ■     Lot  ^/0   x    /  */-g  ft.  to  .2  o  ft.  paved  alley 


CONVENIENCES 

HOT    AND    COLO    WATER 


Heated   by 


Street  paved  with 


OPEN  OB  ENCLOSED  PLUMB." 
BATH  SEWER  


Interior  finish,  etc. 


LAUNDRY    AND   TUBS  

GAS    FIXTURES,    GAS    RANGE- 


Rental  per  mo. 


Lease  Exp. 


Tax  Insurance 

$  O  O  —  $  /&  O  O 


FUEL   GAS    AND    PIPES      

ELECTRIC   WIRES    AND    FIXT- 


Incombrances  $ 


@      %  due 
@      f  due 


CEMENT    CELLAR.  FLOOR-VArf 
CEMENT   SIDEWALK 


&**- 


Es't'd  value  of  land 


Abstract  or  guaranteed  title 


-Y«s-  Yes 

Saleboard    No  Exclusive  Agency-N«— 


Exchange  for    -  '       -  "    A 


Owner* 


<.^ 


When  a  property  is  sold,  the  selling  card  describing  the  property  should  be  removed  from 
the  selling  list,  a  memorandum  of  the  sale  should  be  written  across  the  card,  like  Form  5,  and 
the  card  should  be  filed  back  of  the  selling  list,  for  reference  if  required  at  a  later  date. 

Form  5— Model  Selling  Card  Cancelled. 


Date 


No.  and  St.  J~ 0  £—*JT O  *J-    •Z/t-*-~-r*-~t£y 


Price  $ 


3 


Kind  of  Bid 


Size  of  Bldg^?  tt    */3.  a  ft.     Cost$JZ  ofoSp  — 


CONVENIENCES 
HOT   AND   COLD    WATER     


OPEN    OR    ENCLOSED    PLUMB. 
BATH    SEWCR      ■ 


LAUNDRY   AND   TUBS 

GAS   FIXTURES,    GAS    RANGE- 


FUEL  GAS    AND    PIPES 
ELECTRIC   WIRES    AND    FIXT.' 


CEMENT    CELLAR    FLOOB-'V-^-e/ 
CEMENT   SIDEWALK 


-¥ee- 
Saleboard    No  ExclusW&^Agenjj 


REAL  ESTATE  AND  INSURANCE 


33 


The  Customer's  Ledger  Card. 

The  debits  and  credits  for  customers'  accounts  are  posted  from  the  cash  book  when  the 
entries  are  there  checked.  Other  debits  for  insurance  are  posted  direct  from  the  Policy  Regis- 
ter. All  entries  should  be  itemized,  so  that  statements  may  be  drawn  from  the  ledger  accounts 
without  referring  back  to  the  records.  Customers'  accounts  should  be  balanced  whenever  re- 
mittances are  sent  and  statements  rendered. 

Form  6  — Model  Customer's  Ledger  Card. 


££4Ed£Zzxu^£*e* 


J- 


>=pn^(  J~o/  dL-U*-  a*  J yS'i  3 


,      -JTo  £  ^&*cz£  a  * 


T    f*/»  &+™>  o-n;/1L~z& 


^^^ 


4- 


/ /  S 


f  o  r 


i  j~ 


Xi 


7- 


*/*J!c_     £Z*iZZs7?Z^ri^- 


ff  6 


f±jr 


Policy  Expiration  Card. 

The  insurance  agent  will  fill  out  a  policy  record  card  for  each  policy  issued,  selecting  a 
blank  card  with  the  proper  expiration  month,  after  which  it  should  be  filed  in  the  cabinet  in  a 
group  with  other  cards  having  the  same  expiration  month.  This  classification  of  insurance 
cards  enables  the  agent  to  watch  the  maturities  of  policies  and  arrange  for  renewals  at  the 
proper  time. 

A  policy  for  #500  insurance  in  the  College  Insurance  Co.,  In  favor  of  A.  R.  Andrews  on 
his  office  building  at  501  First  Avenue  and  expiring  July  5,  1906,  will  have  a  policy  expiration 
card  like  the  following : 

Form  7— Model  Policy  Expiration  Card. 

For  the  method  of  filing  this  card,  see  instructions  for  Apartment  No.  2,  on  page  2Q. 

July 


/ 


Policy  No. 


2 


c 


£ 


/ 


Location  ~ 


Company 


^^Z^^^sJ^t^  ^Amount  ^T^__ 


Premium        i_£~~&  3 


Form 


34  HIGHER  ACCOUNTING 


Practice  in  Real  Estate  and  Insurance  Bookkeeping. 

The  following  historical  memoranda  of  transactions  will  give  material  for  bookkeeping 
drill  in  the  accounting  methods  already  explained  and  illustrated.  The  card  records  and  the 
practice  in  assorting  and  classifying  the  different  cards  can  not  well  be  carried  out  in  a  short 
individual  practice  like  this. 

The  student  will  make  all  required  entries  in  the  cash  book,  policy  register,  general  ledger, 
and  customers'  ledger  and  tenants'  ledger  cards,  omitting  all  other  card  records  and  all  busi- 
ness forms. 

For  model  cash  book  and  policy  register,  see  pages  36  and  37. 


Historical  Memoranda. 
Jan.  1,  1906. 

Began  business  as  Real  Estate  and  Insurance  Agent  with  cash  on  hand,  #300. 

Paid  cash  for  office  rent  one  month,  $25. 

Insured  the  following  properties  in  the  College  Insurance  Company: — 

For  J.  C.  Inman,  two  story,  shingle  roof,  frame  dwelling,  No.  219  Center  Ave.,  for  #1000 
for  one  year,  at  a  premium  of  one  per  cent,  on  account. 

(In  this  and  subsequent  records  enter  the  commission  in  Commission  column.  Rate  20 
per  cent  on  new  risks,  1 5  per  cent  on  renewals,) 

For  H.  A.  Sumner,  three  story,  gravel  roof,  brick  store  room,  Nos.  48-50  Commercial 
Ave.,  for  #2000,  for  one  year  at  1  y2  per  cent  premium,  on  account. 

For  G.  C.  Story,  stock  of  dry  goods  in  the  two  story,  tin  roof,  brick  building,  No.  96 
Commercial  Ave.,  for  #1600  for  one  year,  at  i}{  per  cent  premium,  receiving  cash. 

Rented  dwelling  house,  No.  216  Fifth  Street,  belonging  to  J.  C.  Inman,  to  Henry  Parton, 
for  six  months  at  #18  per  month,  receiving  cash  for  one  month  in  advance.  (Fill  out  tenant's 
ledger  card  showing  date  and  amount  of  all  rents  to  maturity.  Open  customer's  ledger  card 
for  J.  C.  Inman.) 

Rented  Store  Room  No.  48  Commercial  Ave.,  belonging  to  H.  A.  Sumner,  to  Jones  & 
Turner  for  one  year  at  $60  per  month,  receiving  cash  for  one  month  in  advance. 

Jan.  2. 

Rented  store  room  No.  52  Commercial  Ave.,  belonging  to  C.  A.  Masters,  to  Smith  & 
Carson,  for  one  year  at  $45  per  month,  receiving  cash  for  two  months  in  advance. 

Insured  the  following  properties  in  the  Commercial  Insurance  Company: — 

For  C.  A.  Masters,  three  story,  gravel  roof,  brick  store  room,  Nos.  52  and  54  Commercial 
Ave.,  for  one  year  for  $3000  at  1  ^  per  cent,  on  account. 

For  Smith  &  Carson,  stock  of  boots  and  shoes  in  the  above  described  store  room,  for  one 
year  for  #igoo  at  1  y^  per  cent,  receiving  cash. 

Insured  the  following  properties  in  the  College  Insurance  Company  : — 

For  H.  A.  Sumner,  two  story,  tin  roof,  frame  dwelling,  No.  457  Poplar  Ave.,  for  two  years 
for  #1400  at  1^  per  cent,  on  account. 

For  Jones  &  Turner,  stock  of  clothing  in  three  story,  gravel  roof,  brick  store  room,  No.  48 
Commercial  Ave.,  for  #1500  for  one  year  at  1^  per  cent,  receiving  cash. 

Rented  store  room  No.  54  Commercial  Ave.,  belonging  to  C.  A.  Masters,  to  Farson  & 
Lee  for  six  months  at  $50  per  month,  receiving  cash  for  one  month  in  advance. 

Paid  cash  for  repairs  on  216  Fifth  Street,  belonging  to  J.  C.  Inman,  #5.25. 

Rented  dwelling  No.  219  Center  Ave.,  belonging  to  J.  C.  Inman,  to  H.  E.  Wilson,  for  one 
year  at  #22.50  per  month,  receiving  cash  for  one  month  in  advance. 

Paid  cash  for  office  supplies  for  the  business,  #8.50. 


REAL  ESTATE  AND  INSURANCE  35 

Jan.  3. 

Paid  cash  for  water  rent  on  52  Commercial  Ave.,  belonging  to  C.  A.  Masters,  #2.50. 

Received  cash  for  notary  fees,  #2.25. 

Sold  lot  and  dwelling  Nos.  216,  218,  and  220  Fourteenth  Street,  belonging  to  C.  J.  Brown, 
to  Herman  Long,  for  $1750,  receiving  cash  $750,  and  a  note  at  one  year  fjr  $1000,  the  note 
and  mortgage  on  the  property  securing  it  being  written  in  favor  of  C.  J.  Bro  va.  By  contract, 
the  commission  on  this  sale  is  $80.  Forwarded  the  note  and  mortgage  to  Brown  with  a  report 
of  the  sale,  showing  net  balance  in  his  favor,  which  enter  in  cash  book  to  his  credit  to  be  re- 
mitted later. 

Rented  store  room  No.  1 5  Commercial  Ave.,  belonging  to  C.  J.  Brown,  to  Hiram  Preston 
for  one  year  at  $47.50  per  month,  receiving  cash  for  two  months  in  advance. 

Paid  cash  for  repairs  on  last  named  property,  $25. 

Insured  the  following  properties  in  the  Commercial  Insurance  Company: — 

For  Herman  Long,  one  story,  shingle  roof,  frame  dwelling,  No.  2 1 8  Fourteenth  Street,  for 
one  year  for  $1000  at  1  per  cent,  receiving  cash. 

For  C.  J.  Brown,  two  story,  gravel  roof,  brick  building,  Nos.  1 5  and  1 7  Commercial  Ave., 
for  one  year  for  $2000  at  1  }4  per  cent,  on  account. 

Insured  the  following  properties  in  the  College  Insurance  Company: — 

For  C.  J.  Brown,  two  story,  gravel  roof,  brick  building,  Nos.  15  and  17  Commercial  Ave., 
for  one  year  for  $1500  at  1%  per  cent,  on  account. 

For  M.  P.  Long,  two  story,  shingle  roof,  brick  dwelling,  No.  916  Twelfth  Street,  for  two 
years  for  $750  at  1  ^  per  cent,  receiving  cash. 

Paid  cash  for  advertising  properties  for  rent,  $12.50. 

Rented  store  room  No.  1 7  Commercial  Ave.,  belonging  to  C.  J.  Brown,  to  J.  R.  Sanders 
for  six  months  at  $40  per  month,  receiving  cash  for  one  month  in  advance. 

Jan.  31. 

Transferred  C.  J.  Brown's  premium  debits  to  his  account  from  the  policy  register  and 
posted  his  entries  from  the  cash  book,  charged  him  five  per  cent  commission  on  rents  collected, 
and  rendered  statement  of  his  account,  remitting  draft  less  exchange  25  cents  for  the  balance  due. 

Transferred  all  other  premium  debits  from  the  policy  register  to  the  customers'  accounts. 

Transferred  the  totals  of  Premiums  and  Commission  from  the  policy  registers  to  the  cash 
book,  debiting  and  crediting  the  proper  titles  and  remitting  a  bank  draft  to  each  insurance  com- 
pany for  the  balance  due. 

Post  all  entries  to  the  general  ledger,  balance  cash,  and  take  a  trial  balance  of  general 
ledger  and  cash  balance. 

Take  a  list  of  balances  of  your  customers'  ledger  cards,  and  compare  it  with  customer's 
account  in  the  general  ledger. 

Feb.  1. 

Collected  cash  of  Henry  Parton  for  second  month's  rent,  $18. 

Rented  office  rooms  1  and  2,  second  floor  of  building  Nos.  48  and  50  Commercial  Ave., 
belonging  to  H.  A.  Sumner,  to  John  G.  Furlong,  for  three  months  for  $16  per  month,  receiving 
cash  for  one  month. 

Paid  cash  for  electric  light  for  office,  $2.50. 

Insured  the  following  properties  in  the  Commercial  Insurance  Company: — 

For  G.  C.  Story,  stock  of  dry  goods  in  the  two  story,  tin  roof,  brick  building,  No.  96  Com- 
mercial Ave.,  for  $1000  for  one  year  at  1^  per  cent,  receiving  cash. 

For  Jones  &  Turner  stock  of  clothing  in  the  three  story,  gravel  roof,  brick  building,  No. 
48  Commercial  Ave.,  for  $2000  for  one  year  at  i}4  per  cent,  receiving  cash. 

Collected  cash  of  Jones  &  Turner  for  second  month's  rent,  $60. 

Received  cash  for  notary  fees,  $1.50. 


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-37- 


38  HIGHER  ACCOUNTING 


Feb.  2. 

Paid  cash  for  painting  store  room,  No.  48  Commercial  Ave.,  bolonging  to  H.  A.  Sumner, 

#33- 

Bought  house  and  lot,  No.  916  Grove  ave.,  of  M.  F.  Reynolds  for  #2,250,  paying  cash 
#200,  and  giving  note  payable  on  or  before  one  year  after  date,  for  the  balance,  the  note  being 
secured  by  mortgage. 

Collected  cash  of  Farson  &  Lee  for  second  month's  rent,  $50. 

Rented  dwelling  house,  No.  929  Sixth  Ave.,  belonging  to  M.  E.  Carter,  to  B.  L.  Sterns, 
for  one  year  at  #20  per  month,  receiving  cash  for  one  month  in  advance. 

Paid  cash  for  advertising  circulars,  #7.50. 

Collected  cash  of  H.  E.  Wilson  for  second  month's  rent,  #22.50. 

Insured  the  following  properties  in  the  College  Insurance  Company : — 

For  M.  E.  Carter,  the  two  story,  shingle  roof,  frame  dwelling,  No.  929  Sixth  Ave.,  for  two 
years  for  #800  at  1  x/2  per  cent,  on  account. 

For  B.  L.  Sterns,  household  furniture  in  above  dwelling  for  one  year  for  $600  at  1  per 
cent,  receiving  cash. 

Paid  cash  for  repairing  windows  in  dwelling  No.  929  Sixth  Ave.,  belonging  to  M.  E.  Carter, 
$2.75. 

Paid  cash  for  office  rent  to  March  1,  #25. 

Received  cash  for  notary  fees,  #3. 

Feb.  3. 

Rented  store  room,  No.  29  Commercial  Ave.,  belonging  to  G.  E.  Waters,  to  H.  C.  Norton, 
for  six  months  at  #25  per  month,  receiving  cash  for  one  month  in  advance. 

Paid  cash  for  advertising  in  Daily  Times,  $10. 

Collected  cash  of  J.  R.  Sanders  for  second  month's  rent,  #40. 

Paid  cash  for  repairs  on  store  room,  No.  29  Commercial  Ave.,  belonging  to  G.  E.  Waters, 
#7.50. 

Insured  the  following  properties  in  the  College  Insurance  Company: — 

For  H.  C.  Norton,  stock  of  groceries  in  one  story,  tin  roof,  brick  building,  No.  29  Com- 
mercial Ave.,  for  six  months  for  #900  at  1  per  cent,  receiving  cash. 

For  H.  A.  Sumner,  two  story,  shingle  roof,  frame  dwelling,  No.  13 16  Ninth  Street,  for  two 
years  for  #1,200  at  1  y2  per  cent,  on  account. 

Insured  the  following  property  in  the  Commercial  Insurance  Company : — 

For  G.E.  Waters,  the  one  story,  tin  roof,  brick  building,  No.  29  Commercial  Ave.,  for  one 
year  for  #1500  at  \x/2  per  cent,  on  account. 

Paid  cash  for  clerk  hire  in  office,  #10. 

Collected  cash  of  Western  Concert  Company  for  rent  of  hall  over  52-54  Commercial  Ave., 
belonging  to  C.  A.  Masters,  #25. 

Feb.  28. 

Transferred  all  premium  debits  from  the  policy  register  to  customers'  accounts. 

Transferred  the  totals  of  premiums  and  commission  from  the  policy  register  to  the  cash 
book,  debiting  and  crediting  the  proper  titles,  and  remitting  a  bank  draft  to  each  insurance 
company  for  the  balance  due. 

Charge  J.  C.  Inman,  H.  A.  Sumner,  and  C.  A.  Masters,  each  for  commission  on  rents 
collected  at  five  per  cent,  and  sent  each  one  a  draft  less  exchange  for  the  balance  due. 

Post  all  entries  to  the  general  ledger,  balance  cash,  and  take  a  trial  balance  of  the  general 
ledger  and  cash  balance. 

Take  a  list  of  balances  of  your  customers'  ledger  cards  and  test  it  as  usual. 

March  1. 

Collected  cash  of  Jones  &  Turner  for  third  month's  rent,  #60. 

Paid  cash  for  water  rent  on  Nos.  48  and  50  Commercial  Ave.,  belonging  to  H.  A.  Sumner, 
#7.50. 


REAL  ESTATE  AND  INSURANCE  39 

Received  cash  for  notary  fees,  $2.50. 

Insured  the  following  properties  in  the  commercial  Insurance  Company: — 

For  Lambert  &  Turner,  stock  of  general  merchandise  in  the  two  story  gravel  roof,  brick 
building,  Nos.  5  and  7  Commercial  Ave.,  for  one  year,  the  same  being  a  renewal  policy  for 
#2000  at  i}£  per  cent,  receiving  cash. 

For  J.  C.  In  man,  two  story,  shingle  roof,  frame  dwelling,  No.  219  Center  Ave.,  for  #1800 
for  six  months  at  }{  per  cent,  on  account. 

Collect  cash  of  John  G.  Furlong  for  second  month's  rent,  $16. 

Paid  cash  for  office  books  and  stationery,  #10.50. 

Paid  cash  for  papering  rooms  in  929  Sixth  Ave.,  belonging  to  M.  E.Carter,  #7.25. 

Insure  the  following  properties  in  the  College  Insurance  Company: — 

For  C.  A.  Masters,  three  story,  gravel  roof,  brick  building,  Nos.  52  and  54  Commercial 
Ave.,  for  one  year  for  $1000  at  1%  per  cent,  on  account. 

For  J.  G.  Casey,  stock  of  boots  and  shoes  in  the  two  story,  tin  roof,  brick  building,  No.  29 
Market  Street,  for  one  year,  the  same  being  a  renewal  policy  for  #1,500  at  #1.40  per  hundred, 
(one  and  two  fifths  per  cent),  receiving  cash. 

Collected  cash  of  Henry  Parton  for  third  month's  rent,  #18. 

Received  cash  for  rent  of  hall  over  52  and  54  Commercial  Ave.,  belonging  to  C.  A.  Mas- 
ters, #15. 

Received  cash  of  R.  E.  Jordan  for  a  month's  rent  of  our  house  and  lot,  No.  916  Grove 
Ave.,  #20.     (Property  belonging  to  firm.) 

Paid  cash  for  circulars  for  advertising  business,  #8. 

March  2. 


Un- 


collected cash  of  B.  L.  Stearns  for  second  month's  rent,  #20. 

Paid  cash  for  reparing  roof,  Nos.  52  and  54  Commercial  Ave.,  belonging  to  C,  A.  Masters, 


Received  cash  for  notary  fees,  #1.50. 

Insure  the  following  properties  in  the  Commercial  Insurance  Company: — 

For  C.  J.  Brown,  two  story,  slate  roof,  brick  dwelling,  No.  248  Division  Street,  for  two  years 
for  #1800  at  #1.50  per  hundred,  on  account. 

For  R.  I.  Harmer,  household  goods  in  the  one  story,  shingle  roof,  frame  dwelling,  No. 
419  Division  Street,  for  one  year  for  #900  at  1  per  cent,  receiving  cash. 

Collected  cash  of  Farson  &  Lee  for  third  month's  rent,  $50. 

Paid  cash  for  heating  office,  $6.50. 

Received  cash  for  notary  fees,  $2. 

Collected  cash  of  Smith  &  Carson  for  third  month's  rent,  #45. 

Sold  lot  and  dwelling,  929  Sixth  Ave.,  belonging  to  M.  E.  Carter,  to  B.  L.  Stearns  for 
#2800  less  a  month's  rent  paid  in  advance  this  morning,  and  five-sixths  of  the  premium  paid  for 
insuring  the  property  in  February,  receiving  a  note  for  #2000  secured  by  a  mortgage  on  the 
property  written  in  favor  of  Carter,  and  cash  #770.  The  commission  on  this  sale  is  $1 14.  For- 
warded the  note  and  mortgage  to  Carter  with  a  report  of  the  sale  and  credited  the  balance  until 
final  report  is  rendered.     Steam's  lease  contract  is  cancelled  by  above  sale. 

Received  cash  of  Stearns  for  acknowledging  above  mortgage,  50  cents. 

Paid  cash  to  the  Daily  Times  for  advertising  property  for  sale,  $1$. 

Collected  cash  of  H.  E.  Wilson  for  third  month's  rent,  $22.50. 

Paid  cash  for  office  rent  for  March,  #25. 

Paid  cash  for  repairs  on  No.  219  Center  Ave.,  belonging  to  J.  C.  Inman,  #8.75. 

March  3. 

Collected  cash  of  Hiram  Preston  for  third  month's  rent,  $47.50. 
Paid  cash  for  postage  for  office,  $1.50. 

Paid  cash  for  city  taxes  on  15  and  17  Commercial  Ave.,  belonging  to  C.  J.  Brown,  #37.50. 
Issued  renewal  policies  in  the  College  Insurance  Company  on  the  following  properties: — 
For  A.  R.  King,  two  story,  shingle  roof,  frame  building,   No.   219   Commercial  Ave.,  for 
one  year  for  #2000  at  $1.35  per  hundred,  receiving  cash. 


40  HIGHER  ACCOUNTING 


For  C.  J.  Brown,  two  story,  gravel  roof,  brick  building,  Nos.  1 5  and  1 7  Commercial  Ave., 
for  #2000  for  one  year  at  #1.50  per  hundred,  on  account. 

Collected  cash  of  H.  C.  Norton  for  second  month's  rent,  $25. 

Sold  our  house  and  lot,  No.  916  Grove  Ave.,  to  R.  E.  Jordan  for  $2800.  Jordan  paid  the 
note  and  interest  on  same  to  date,  $10.59,  which  was  secured  by  mortgage  on  this  property, 
thereby  releasing  the  mortgage,  and  handed  us  cash  for  the  balance  of  the  purchase  price. 

Received  cash  for  notary  fees,  $1. 

Paid  cash  for  circulars  for  advertising  properties,  $7.50. 

Collected  cash  of  J.  R.  Sanders  for  third  month's  rent,  $40. 

March  3 1 . 

Transferred  all  premium  debits  from  the  policy  registers  to  customers'  accounts. 

Transferred  the  totals  of  premiums  and  commissions  from  the  policy  registers  to  the  cash 
book,  debiting  and  crediting  the  proper  titles,  and  remitting  bank  drafts  less  exchange  for  bal- 
ances due  the  insurance  companies. 

Instructions  for  Closing. 

Post  each  customer's  account  and  debit  each  for  commission  at  five  per  cent  on  rents  you 
have  collected  for  them  since  last  statement.  Send  each  customer  a  bank  draft  less  exchange 
for  the  balance  due. 

Post  all  general  entries  and  balance  customers'  accounts,  balance  cash,  and  take  a  trial 
balance  of  the  general  ledger  and  cash  balance. 

Inventory  books  and  stationery  for  office  use  on  hand  worth  #10. 

Make  a  financial  statement  and  close  your  general  ledger. 

Questions  on  IVeal  Estate  and  Insurance. 

1 .  What  two  distinct  lines  of  business  are  provided  for  in  this  set? 

2.  What  is  the  nature  of  a  real  estate  business?     Of  a  renting  agency?     Of  an  insurance 
agency  ? 

3.  Why  are  card  records  especially  suited  to  this  line  of  business? 

4.  Describe  the  renting  card  and  tell  how  used. 

5.  Describe  the  tenant's  ledger  and  tell  how  used. 

6.  Describe  the  selling  card  and  tell  how  used. 

7.  Describe  the  policy  expiration  card  and  tell  how  used. 

8.  What  accounts  are  kept  in  the  customer's  ledger  ? 

9.  How  often  are  remittances  made  to  insurance  companies  in  settlement  for  premiums 
collected  ? 

10.  Where  are  the  current  accounts  with  insurance  companies  kept? 

11.  Describe  the  special  column  cash  book  used. 

12.  From  what  two  books  are  debits  to  the  customer's  ledger  posted? 

13.  From  what  book  are  credits  to  the  customer's  ledger  posted? 

14.  When  a  customers'  account  is  closed  by  charging  commission  and  cash  to  balance, 
what  entry  is  made? 

15.  What  entries  are  made  in  closing  the  monthly  account  with  insurance  companies? 

16.  What  accounts  are  kept  in  the  general  ledger? 

17.  From  what  accounts  are  profits  expected? 

18.  What  accounts  show  losses? 


PRACTICAL  BANKING. 


The  steps  necessary  to  the  organization  of  a  national  or  private  bank  are  so  dependent  on 
legislation  from  time  to  time,  that  they  who  are  about  to  organize  such  an  enterprise  should  con- 
sult the  best  authority  at  the  time  and  in  the  locality  in  which  they  propose  to  do  business. 
It  would  not  be  wise,  therefore,  for  us  to  bewilder  the  student  in  bank  bookkeeping  with  a  dis- 
cussion of  the  origin  and  organization  of  banking  institutions. 

The  transactions  of  a  bank  require  so  many  records,  that  it  has  been  the  study  of  all  book- 
keepers to  make  the  system  as  brief  as  possible,  without  sacrificing  the  completeness  of  the 
record.  The  banker  needs  to  keep  such  records  as  will  show  him  the  condition  of  his  affairs  at 
a  glance;  and  as  his  records  have  largely  to  do  with  all  business  men  around  him,  it  is  essential 
that  he  use  every  known  method  of  proving  his  accounts  absolutely  correct.  • 

The  business  of  a  bank  usually  consists  of  four  departments  ;  that  of  receiving  deposits  and 
paying  depositors'  checks,  called  Deposits ;  that  of  buying  and  selling  drafts  on  other  banks, 
called  Exchange;  that  of  lending  money  to  business  men  on  notes  properly  secured  and  running 
for  short  periods  of  time,  called  Discounts  ;  and  that  of  collecting  notes  and  drafts  for  business 
men,  called  Collections.  The  methods  of  recording  the  last  three  divisions  do  not  materially 
differ  in  the  various  systems ;  hence,  we  have  chosen  forms  for  these  books  that  seem  to  us  well 
adapted  to  any  ordinary  banking  business. 

There  are  two  leading  systems  of  bank  bookkeeping,  differing  mainly  in  the  style  of 
\edger  used.  In  the  older  of  these  systems,  the  records  of  all  transactions  are  carried  to  journals 
or  cash  book,  and  from  these  to  the  ledger,  as  in  other  lines  of  business,  except  that  the  ledger 
is  made  to  show  the  balance  of  each  account  daily.  In  the  later  system,  which  is  being  received 
by  bankers  with  great  favor,  the  transactions  pertaining  to  depositors'  accounts  are  recorded 
directly  in  the  ledger  from  the  original  tickets,  without  the  use  of  either  journal  or  cash  book. 

The  object  sought  by  all  bankers  is  to  make  their  books  show  the  present  condition  of  each 
depositor's  account,  the  relation  of  the  bank  to  all  persons  and  institutions  with  which  it  has 
dealings,  and  also  by  keeping  accounts  with  the  various  departments  of  bank  industry,  to  deter 
mine  the  profits  and  losses,  and  the  sources  of  each. 

THE  DAILY  ROUTINE  IN  BANKING. 

Routine  work  in  banking  naturally  divides  itself  into  three  departments. 

First — That  of  the  Teller,  whose  office  it  is  to  receive  and  pay  out  all  cash,  and  to  file 
tickets,  properly  describing  each  transaction. 

Second — That  of  the  Bookkeeper,  who  records  in  the  cash  book  and  ledgers  -the  various 
tickets  filed  by  the  teller,  making  a  daily  trial  balance  of  the  ledger,  and  showing  the  condition 
of  the  bank  at  the  close  of  each  day, 

Thitd — That  of  the  Cashier,  who  attends  to  the  general  business  of  the  bank,  including 
the  loans  and  discounts,  the  correspondence  and  collections,  and  the  signing  of  drafts,  and  who 
has  a  general  supervision  of  the  other  officers  and  clerks  in  the  bank. 

In  a  large  bank  the  work  in  each  department  may  be  subdivided  among  a  number  of 
clerks,  while  in  a  small  bank  one  man  may  attend  to  all  of  these  departments. 

-  A  large  proportion  of  the  transactions  carried  out  by  the  teller  and  cashier  are  such,  that 
some  paper  is  left  in  the  possession  of  the  bank  from  each,  from  which  the  bookkeeper  can  get 
the  history  of  the  several  transactions.     If  no  paper  is  left  in  connection  with  a  transaction,  the 

-41- 


42  HIGHER  ACCOUNTING 


officer  is  required  to  fill  out  a  ticket  giving  the  result  of  the  transaction.  If  a  deposit  is  received, 
the  depositor  presents  a  deposit  ticket  which  the  teller  places  on  file;  if  a  depositor's  check  is 
cashed,  the  check  is  placed  on  file  for  the  bookkeeper.  If  the  teller  or  cashier  receives  a  check 
or  draft  drawn  on  some  other  bank,  he  places  it  in  the  remittance  drawer  until  the  close  ot 
banking  hours.  If  he  sells  a  bank  draft,  he  enters  a  description  of  the  draft  at  once  in  the  Draft 
Register. 

If  he  discounts  a  paper,  he  pencils  the  amount  of  the  discount  and  proceeds  paid,  on  the 
paper  and  places  it  in  the  discount  drawer,  or  he  writes  this  memorandum  on  a  discount  ticket 
ar,a  pins  it  to  the  discounted  paper,  until  it  is  recorded  in  the  Discount  Register.  If  he  collects 
cash  for  a  discounted  paper,  the  same  is  marked  paid,  at  once,  in  the  Discount  Register,  and  a 
ticket  is  written  out  and  placed  on  file,  descriptive  of  the  transaction. 

If  a  paper  is  left  at  the  bank  for  collection,  the  same  is  placed  in  the  collection  drawer,  ready 
for  entry,  later  in  the  day,  in  the  Collection  Register.  If  a  paper  previously  left  for  collection, 
is  paid,  it  is  marked  paid,  at  once,  in  the  Collection  Register,  and  tickets  are  written  and  filed 
showing  the  results. 

If  a  certificate  of  deposit  is  issued  for  money  received  or  for  the  proceeds  of  a  collection,  it 
is  entered  at  once,  in  the  Certificate  of  Deposit  Register,  and  no  ticket  is  filed.  If  a  certificate 
of  deposit  is  paid,  the  canceled  certificate  is  placed  on  file. 

If  the  teller  is  required  to  certify  a  check,  he  should  find  out  whether  the  person  drawing 
the  check  has  a  balance  to  his  credit,  and  if  he  has,  the  teller  writes  "Certified,"  giving  the  date 
and  signing  his  name  as  teller  of  the  bank,  across  the  face  of  the  check.  Each  certified  check 
is  entered  in  the  Certified  Check  Register,  from  which  the  debits  and  credits  are  carried  at  the 
close  of  the  day.  If  a  certified  check  is  paid,  the  canceled  check  is  placed  on  file,  and  at  the 
close  of  the  day  is  debited  to  Certified  Checks. 

If  any  other  kind  of  transaction  is  carried  out,  a  ticket  is  filed  containing  such  a  description 
as  will  enable  the  bookkeeper  to  make  a  proper  record  of  the  same  at  the  close  of  banking 
hours. 

For  convenience  in  describing  the  bank  books,  we  will  classify  them  into  two  groups,  which 
we  will  name  the  Auxiliary  Books  and  the  Essential  Books. 

THE  AUXILIARY   BOOKS. 

The  Draft  Register  contains  a  description  of  all  drafts  sold  by  the  bank.  These  drafts  are 
usually  drawn  on  a  bank  located  in  some  commercial  center.  Banks  frequently  arrange  withtwo 
or  more  such  correspondents :  one  perhaps  at  New  York  or  Philadelphia,  a  second  at  Chicago, 
a  third  at  St.  Louis,  or  some  other  western  point.  For  convenience  there  should  be  a  separate 
register  for  each  bank  on  which  we  draw  drafts.  The  total  of  drafts  sold  each  day  is  credited 
to  the  bank  on  which  we  have  drawn  the  drafts,  their  account  being  kept  in  the  General  Ledger. 
The  total  received  for  exchange  each  day  is  also  carried  to  the  same  ledger  to  the  credit  of  Ex- 
change. 

Should  there  be  several  regular  correspondents  of  the  bank,  they  could  have  as  many  sep- 
arate registers:  or  a  separate  part  of  the  one  register  could  be  assigned  to  each  correspondent. 

The  Remittance  Register  contains  a  description  of  all  drafts,  checks,  and  other  commercial 
paper  that  have  been  forwarded  to  the  bank's  correspondent,  usually  the  one  on  whom  drafts 
are  drawn. 

The  Draft  Register  gives  an  itemized  record  of  the  credits  of  the  bank's  correspondent,  and 
the  Remittance  Register  gives  an  itemized  record  of  the  debits  of  the  same  party,  and  the  ledger 
account  with  the  bank  shows  the  result. 

The  Discount  Register  contains  a  description  of  all  notes  and  time  drafts  bought  by  the 
bank  or  received  for  money  loaned.  If  an  interest  bearing  note  is  discounted,  it  is  customary  to 
compute  the  interest  to  maturity  and  add  it  to  the  face  of  the  note.  The  total  of  principal  and 
interest  is  the  amount  on  which  the  bank  discount  is  computed.  If  the  note  does  not  bear  in- 
terest, the  face  of  the  note  is  carried  to  the  amount  column,  and  the  total  of  these  amounts  for 
the  day  is  carried  to  the  debit  of  Bills  Discounted  in  the  General  Ledger. r  The  discount,  the 
amount^deducted  from  each^is  entered  in  a  special  column  in  the  register,  and  the  total  carried 
to  the  credit  of  Discount  in  the  General  Ledger.  When  the  discounts  are  paid,  they  are  entered 
paid-in  the  remark  column  of  the  register,  and  there  being  no  paper  left  to  file  in  the  bank  as  a 


PRACTICAL  BANKING  43 


record  of  the  transaction,  a  ticket  is  placed  on  file  with  a  memorandum,  "Credit  Bills  Dis. 

$ ,"  and  under  this  the  explanation,  "  Discount  No. paid."     The  amount  of  these  tickets 

is  carried  to  the  credit  of  Bills  Discounted  in  the  General  Ledger.  • 

The  Collection  Registet  contains  a  description  of  all  paper,  notes,  or  bills,  left  at  the  bank 
by  other  parties  for  collection;  as  these  papers  do  not  affect  the  business  of  the  bank  until  their 
payment,  no  record  of  them  is  carried  from  the  register  to  either  ledger.  When  the  collections, 
that  is,  the  papers  above  referred  to,  are  paid,  they  are  entered  paid  in  the  remark  column  of  the 
register,  and  a  ticket  is  filed  for  each,  stating  whom  to  credit  with  the  proceeds  of  the  collec- 
tion, that  is,  the  amount  that  is  left  after  the  collection  charges  are  deducted.  When  collection 
No.  3,  left  by  H.  C.  Cusey,  is  paid,  the  banker  will  Write  a  ticket  as  follows:  "Credit  H.  C. 
Cusey  $598.50,  proceeds  of  Collection  No.  3."  He  will  also  write  a  second  ticket,  "Credit  Col- 
lection $1.50,  charges  on  Col.  No.  3." 

If  the  party,  for  whom  the  paper  was  collected,  is  a  regular  depositor,  the  proceeds  of  the 
collection  will  be  entered  as  a  deposit  from  the  ticket  filed.  If  he  is  not  a  depositor,  his  pro- 
ceeds are  entered  as  a  certificate  of  deposit,  and  he  can  draw  the  money  at  any  time  by  endors- 
ing the  certificate.  Some  bankers  credit  transient  customers  with  such  proceeds,  and  require 
them  to  check  out  the  amount,  thus  balancing  the  accounts.  Such  accounts  are  usually  kept 
in  a  separate  ledger,  called  Petty  Deposits. 

If  the  paper  has  been  collected  for  some  out-of-town  party,  a  draft  is  sent  at  once  for  the 
proceeds  of  the  collection  and  the  charge  for  collection  is  entered  as  exchange  on  the  draft. 
No  ticket  should  be  filed  in  such  a  transaction,  as  the  results  will  appear  in  the  totals  taken  from 
the  Draft  Register. 

As  soon  as  a  collection  or  discount  has  been  entered  paid  in  the  remark  column  of  'either 
register,  and  a  ticket  for  the  same  has  been  filed,  a  check  mark  should  be  made  in  the  register 
to  indicate  that  the  record  is  completed. 

The  Certificate  of  Deposit  Registet  contains  a  description  of  all  certificates  issued  by  the 
bank,  and  when  these  are  paid,  the  date  of  payment  is  entered  in  the  proper  columns.  The  total 
of  these  certificates  issued  each  day,  is  carried  to  the  credit  of  Certificates  of  Deposit,  this  ac- 
count being  kept  in  the  Deposit  Ledger.  The  paid  certificates  are  entered  in  the  Deposit  Ledger 
to  the  debit  of  Certificates  of  Deposit. 

The  Certified  Check  Register  contains  a  list  of  the  checks  that  are  certified  for  depositors. 
These  checks  are  debited  to  the  depositors'  accounts,  the  same  as  paid  checks,  and  the  total 
amount  of  certified  checks  is  credited  to  Certified  Checks  in  the  General  Ledger.  When  certi- 
fied checks  are  paid  by  the  bank,  they  are  debited  to  Certified  Checks. 

The  Signature  Book  contains  the  signature,  business  address,  and  kind  of  business  of  each 
depositor.     These  are  arranged  in  alphabetical  order,  for  convenience  in  referring  to  signatures. 

The  Discount  Tickle?  and  the  Collection  Tickler  are  books  that  may  or  may  not  be  used. 
Their  office  is  to  group  together,  under  each  date,  all  discounts  and  collections  that  fall  due  on 
that  date,  in  order  that  the  cashier'  may  know  whether  all  papers  are  paid  at  maturity,  and,  if 
not  paid,  that  he  may  take  the  necessary  steps  of  notice  and  protest  for  non-payment.  Ticklers 
do  not  give  a  complete  history  of  each  paper,  merely  giving  the  register  number,  the  payer  of  the 
paper  and  his  residence,  the  endorser  or  owner,  and  the  amount  of  the  paper. 

In  modern  banking  the  use  of  the  tickler  is  largely  supplied  by  the  use  of  a  large  wallet  or 
drawer,  with  separate  apartments  for  each  day  of  the  month.  The  discounts  and  collections 
are  placed  in  these  apartments  according  to  their  maturity  dates,  so  that  they  may  be  readily 
found  when  wanted.  If  the  papers  are  thus  classified  by  maturity  dates,  the  ticklers  will  scarcely 
be  needed,  and  the  papers  left  unpaid  will  be  readily  found,  when  wanted. 

By  inquiring  of  progressive  bankers,  we  find  that  a  large  proportion  of  them  do  not  use  the 
ticklers,  and  in  harmony  with  this  custom,  we  have  omitted  these  auxiliary  books  from  our 
banking  course,  as  their  use  or  omission  does  not  in  the  least  affect  any  of  the  results. 

THE   ESSENTIAL   BOOKS. 

The  essential  books  in  banking  are  the  Cash  Book,  Depositors'  Ledger,  and  General 
Ledger.  Some  bankers  discard  the  cash  book,  and  post  all  debits  and  credits  direct  to  the 
ledgers  from  the  tickets.  We  would  advise  the  use  of  the  cash  book  for  recording  all  debits 
and  credits  that  belong  to  accounts  in  the  general  ledger.     In  writing  up  the  bank  books  each 


44  HIGHER  ACCOUNTING 


day,  the  depositors'  ledger  should  be  written  first,  the  cash  book  second,  and  the  general  ledger 
last,  and  we  will  describe  the  books  in  this  order.  '  » 

The  Depositors'  Balance  Ledger  is  ruled  so  that  each  depositor's  account  occupies  but  a 
single  line  extending  horizontally  across  the  page.  Each  day's  space  is  divided  into  four  col- 
umns, one  for  checks  and  debit  items  in  detail,  a  second  for  the  total  of  these  debits,  a  third  for 
the  depositor's  credit,  and  a  fourth  for  his  balance  at  the  close  of  the  dav.  In  large  banks, 
where  the  depositors  are  likely  to  draw  a  large  number  of  checks  daily,  they  provide  two  col- 
umns daily  for  checks  in  detail,  and  sometimes  two  columns  for  deposits  and  credits,  thus  mak- 
ing five  or  six  columns  in  each  day's  space.  The  space  between  the  horizontal  lines  is  made 
wide,  so  that  there  may  be  room  to  list  a  considerable  number  of  checks  for  each  depositor,  if 
small  figures  are  used. 

Large  books  are  used,  so  that  an  open  folio  of  two  pages  will  contain  the  records  for  one 
week,  the  accounts  being  forwarded  to  a  new  folio  on  each  succeeding  Monday. 

Bankers  who  use  this  style  of  ledger,  usually  have  the  names  of  their  permanent  depositors 
printed  in  alphabetical  order  in  the  book  when  it  is  ruled,  leaving  enough  of  blank  space  for 
others  that  may  be  added  during  the  year.  In  this  way,  the  labor  of  copying  the  names  once  a 
week  either  for  ledger  or  trial  balance  is  avoided,  the  only  labor  of  forwarding  the  accounts 
bei.ig  the  transfer  of  balances  from  one  folio  to  another. 

The  deposit  tickets  and  the  paid  checks,  except  paid  certified  checks,  are  taken  from  the 
teller's  file  and  entered  direct  in  the  depositors'  ledger,  and  the  checks  certified  by  the  teller  dur- 
ing the  day,  and  recorded  in  the  certified  check  register,  are  also  entered  in  the  depositors' 
ledger  to  the  debit  of  the  firms  who  drew  the  checks.  If  a  depositor  has  a  balance  to  his  credit 
at  the  close  of  the  day,  his  balance  is  written  in  black  ink ;  but  if  he  has  been  allowed  to  over- 
draw his  account  and  he  has  a  balance  due  the  bank,  the  debit  balance  is  written  in  red  ink. 

The  Cash  Book  contains  all  titles  and  amounts  that  belong  to  the  general'  ledger.  The 
total  of  the  checks  entered  in  the  depositors'  ledger  is  entered  in  the  cash  book  as  cash  paid, 
debiting  Deposits,  and  the  total  of  the  deposits  entered  in  the  depositors'  ledger  is  entered  in  the 
cash  book  as  cash  received,  crediting  Deposits.  The  total  of  drafts  recorded  in  the  draft  regis- 
ter is  entered  in  the  cash  book  as  cash  received,  crediting  the  bank  on  whom  the  drafts  were 
drawn,  and  the  total  of  exchange  in  the  draft  register  is  entered  in  the  cash  book  as  cash  re- 
ceived, crediting  Exchange.  The  total  of  remittances  recorded  in  the  remittance  register  is 
entered  in  the  cash  book  as  cash  paid,  debiting  the  bank  to  whom  the  remittances  were  sent. 
The  total  amount  of  notes  and  bills  entered  in  the  discount  register  is  entered  in  the  cash  book 
as  cash  paid,  debiting  Bills  Discounted,  and  the  total  discount  in  the  discount  register  is  entered 
in  the  cash  book  as  cash  received,  crediting  Discount.  The  total  of  certified  checks  recorded 
in- the  Certified  Check  Register  is  entered  in  the  cash  book  as  cash  received,  crediting  Certified 
Checks.  All  other  debits  and  credits  are  entered  from  paid  certified  checks  and  from  debit  and 
credit  tickets  left  on  file  by  the  teller. 

If  all  tickets  debiting  or  crediting  the  same  title  are  combined  in  the  cash  book,  before  they 
are  extended  to  the  amount  columns,  the  work  of  posting  to  the  general  ledger  will  be  greatly 
reduced,  and  special  columns  will  not  be  required  in  the  cash  book.  If  all  transactions  have 
been  properly  ticketed  and  the  tickets  properly  entered,  the  cash  book  will  show  a  balance  equal 
to  the  cash  on  hand.  Counting  the  cash  and  proving  it  equal  to  the  cash  balance,  is  a  daily 
test  of  the  accuracy  of  the  teller's  transactions. 

The  General  Ledger  contains  all  accounts  of  the  bank  except  those  with  depositors  and 
certificates  of  deposit.  Some  bankers  give  certificates  of  deposit  an  account  in  the  general 
ledger,  and  do  not  enter  certificates  of  deposit  in  the  depositors'  ledger. 

We  have  chosen  a  style  for  the  general  ledger  which  is  quite  commonly  used.  Two 
accounts  can  be  placed  on  a  page,  and  thus  the  ledger  maybe  made  very  compact.  It  consists 
of  columns  for  date,  folio  of  the  cash  book,  debit  entries,  credit  entries,  and  the  balances,  written 
in  red  for  debit  balances,  and  in  black  for  credit  balances.  If  a  debit  and  credit  occur  on  the 
same  day,  they  can  be  entered  on  the  same  line,  the  date  column  being  common. 

This  style  of  ledger  is  well  adapted  to  the  general  accounts  in  the  bank,  because  there  are 
but  few  of  these,  compared  with  the  number  of  depositors,  and  the  labor  of  carrying  balances 
over  to  the  trial  balance  is  not  so  protracted. 

An  account  is  kept  with   Deposits  in  the  general  ledger,  the  total  of  the  checks  paid  or 


PRACTICAL  BANKING  45 


certified  during  the  day  being  carried  from  the  cash  book  to  the  debit  of  this  account,  and  the 
total  of  the  deposits  received  being  carried  to  its  credit.  The  credit  balance  in  Deposits  account 
should  equal  the  total  credits  of  the  various  depositors  in  the  deposit  ledger,  or,  if  some  deposit- 
ors have  been  allowed  to  overdraw,  the  difference  between  the  total  credit  balances  of  depositors 
and  the  total  overdrafts,  will  equal  the  balance  of  Deposits  account  in  the  general  ledger. 

The  Petty  Ledger  should  be  kept  in  a  book  specially  ruled  for  its  records,  containing  tran- 
sient accounts  that  do  not  require  but  a  line  apiece.  Entries  in  this  ledger  are  itemized  very 
much  like  the  registers.  A  single  line  is  given  to  each  account.  If  a  debit  entry  is  made  first, 
the  line  opposite  on  the  credit  side  is  left  vacant  until  the  corresponding  credit  is  made,  which 
cancels  the  account ;  and  if  a  credit  is  made  first,  the  opposite  line  on  the  debit  side  is  left  vacant 
until  the  corresponding  debit  is  made.  The  total  of  the  debit  entries  in  this  ledger,  less  the 
total  of  the  credit  entries,  or  the  reverse,  if  the  credit  entries  are  the  larger,  can  be  carried  to 
the  trial  balance  with  the  title  Petty  Ledger. 

The  Trial  Balance  Book  contains  each  title  in  the  general  ledger,  the  title  Petty  Ledger, 
and  the  cash  balance,  and  the  debits  and  credits  of  these  several  titles  should  balance  when  they 
are  added. 

The  Bank  Statement  is  given  in  the  form  usually  published  by  banks,  although  it  does  not 
enable  one  to  know  the  real  worth  of  the  bank;  because,  Expense  is  classed  as  a  resource,  yet 
all  of  expense  except  the  inventory  is  properly  a  loss.  Bills  discounted  are  classed  as  resources, 
and  yet  it  sometimes  happens  that  these  are  not  properly  secured,  and  that  they  are  worth  much 
less  than  the  figures  shown. 

To  ascertain  the  present  worth  of  any  business,  the  present  value  of  all  real  and  personal 
accounts  must  be  determined.  However,  such  statements  as  the  one  illustrated  are  of  great 
benefit,  because  they  enable  one  to  judge  quite  intelligently  of  the  condition  of  the  bank,  and  of 
its  sources  of  loss  and  gain. 

TRANSACTIONS. 

March  4,  190 

The  following  persons  have  this  day  formed  a  co-partnership  for  the  purpose  of  conducting 
a  private  banking  business  in  College  City,  any  state,  each  partner  investing  as  per  schedule 
of  names  below;  the  gains  or  losses  to  be  divided  according  to  the  investment  of  each.  The 
firm  title  is  Barrett,  Lindsay  &  Co. 

W.  H.  Barrett  invested  cash  $4,000 

S.  I.  Lindsay 


E.  A.  Parker 
J.  L.  Tompkins 
H.  M.  Seeley 
J.  H.  Bennet 


3,000 
2,500 
3,500 
4,000 
3,000 
$20,000 


[The  partners'  investment  accounts  should  be  kept  in  a  separate  book,  as  it  is  less  labor  to 
carry  forward  the  total  investment  in  one  account  in  the  general  ledger,  as  Capital  Stock.  V 
the  partners  shouldbecome  depositors,  they  can  then  have  deposit  accounts  kept  separate  from 
their  investment  accounts.] 

In  recording  the  following  banking  transactions,  the  student  will  make  the  necessary  entries  in  the  auxiliary 
books,  and  will  make  debit  and  credit  tickets  for  such  transactions  as  do  not  require  entry  in  the  auxiliary  books.  At 
the  close  of  each  day  the  text  will  give  a  list  of  deposit  tickets  and  paid  certificates  and  checks  on  file  for  the  day. 
The  depositors'  ledger  can  be  written  up  from  this  report,  slier  which  the  cash  book  can  be  written  up  from  the  to- 
tals in  the  depositors'  ledger  and  auxiliary  books,  the  paid  certified  checks  reported,  and  the  debit  and  credit  tickets 
filed  for  the  day. 

Paid  cash  for  one  month's  office  rent  in  advance  $75.     (Debit  ticket — Expense.) 
Paid  cash  for  safe  and  office  fixtures  $57$.     (Debit  ticket—  -Office  Fixtures.) 
Paid  cash  for  books  and  blanks  for  office  use  $150.     (Debit  ticket — Expense.) 
Sent   cash   to   the   Central  Bank  of  Central  City,  for  our  own  credit,  $3000.     (Remittance 
Register.)     Paid  express  charges  on  same  $1.25.     (Debit  ticket — Expense.) 


46  HIGHER  ACCOUNTING 


The  following  draits  have  been  received  on  deposit  or  for  cash  during  the  day,  and  we 
have  forwarded  them  to  the  Central  Bank  of  Central  City  for  our  credit.  No.  359,  First  N.  B., 
Chicago,  dated  March  1,  on  Fourth  N.  B.,  New  York,  for  #1,000,  indorsed  by  M.  Mason;  No. 
652,  Com.  B.,  Buffalo,  dated  Mar.  1,  on  Marine  N.  B.,  Boston,  for  #900,  indorsed  by  G.  Ryan  ; 
No.  929,  First  N.  B.,  Peru,  111.,  dated  Mar.  2,  on  Trader's  Nat.  Bank,  New  York,  for  #1,200, 
indorsed  by  J.  D.  Atwood. 

If  the  above  drafts  were  received  on  deposit,  they  will  appear  on  the  deposit  tickets  given  below.  If  we  gave 
cash  for  th°rn,  it  has  merely  reduced  our  cash  balance,  and  the  only  record  required  is  in  the  Remittance  Register. 

Drew  the  following  drafts  on  our  Central  City  correspondent,  the  Central  Bank:  No.  1, 
fav.  J.  Stacey  #300;  No.  2,  fav.  J.  Springer  #200;  No.  3,  fav.  H.  Wentworth  #137.75;  No.  4,  to 
H.  Wentworth  fav.  Jones  &  Lane  #362.25,  charging  exchange  on  No.  1,  38  cts.;  No.  2,  25  cts.; 
No.  3,  17  cts.;  No.  4,  46  cts. 

Discounted  the  following  notes  and  bills:  For  W.  M.  Smith,  note  his  favor,  signed  by  R. 
C.  Crawford,  dated  Jan.  5,  due  in  two  months,  #1,000.  Proceeds  cash  #996.50,  discount 
#3.50. .  .  .For  M.  Mason,  note  his  favor,  signed  by  D.  Ford,  dated  Feb.  4,  due  in  1  month, 
#500.  Proceeds  included  on  his  deposit  ticket  below  and  counted  as  cash,  #499.75,  discount 
25c. 

The  following  checks  on  local  banks  have  been  received  as  cash,  and  have  been  forwarded 
to  the  banks  named  for  collection:  J.  Miner's  check  No.  1,  on  First  N.  B.,  Toledo,  indorsed 
by  J.  Burgess,  #375;  H.  Harting's  check  No.  7,  on  College  Bank  of  Iowa  City,  indorsed  by 
Lee  &  Avery,  #  1 2 5 .  [As  these  banks  are  not  our  regular  correspondents,  their  accounts 
should  be  kept  in  the  Petty  Ledger.] 

The  following  paper  has  been  left  at  the  bank  for  collection:  For  R.  E.  Rowley,  draft  ac 
three  days'  sight  on  M.  E.  King,  Waterloo,  for  #238.75.  Forwarded  to  the  Union  N.  B., 
Waterloo,  to  collect  for  us.  For  G.  Stone,  note  his  favor,  signed  by  M.  Stanley,  dated  Feb.  9, 
time  30  days,  for  #500.  For  H.  C.  Cusey,  his  sight  draft  on  Starr  &  Seeley,  Clinton,  for  #600, 
forwarded  to  Clinton  Co.  Bank  to  collect  for  us.  [If  no  date  is  named  on  these  drafts,  they 
should  have  the  same  date  as  the  transaction.] 

Paid  for  postage  and  stationery  #3.75.     (Debit  ticket — Expense.) 

The  deposit  tickets  on  file  show  the  following  deposits  received  to-day:  M.  Mason  #1,600, 
J.  Burgess  #848.50,  J.  Ryan  #1,400,  J.  D.  Atwood  #1,500,  Chase  &  Smith  #175,  Lee  &  Avery 
#325,  C.  Matter  #215.50,  Howard  &  Payne  #192.75,  James  York  #316.85. 

The  following  paid  checks  are  on  file  at  the  close  of  the  day:  James  York  #56,  #29.65, 
#32.25;  J.  D.  Atwood  #39.95,  #16.50,  #34.90;  M.  Mason  #95.50,  #140.50,  #29.60;  Chase  & 
Smith  #29.75;  J-  Burgess  #28.85,  #29.56,  #37.50. 

The  cash  on  hand  at  the  close  of  the  day  amounts  to  #16,073.10. 

The  student  should  write  up  and  balance  the  depositors'  ledger  and  cash  book,  and  post  the  general  ledger  and 
takea  trial  balance  of  the  same.  The  total  of  the  balance  column  in  the  depositors'  ledger  should  agree  with  the  bal- 
ance of  deposits'  account  in  the  general  ledger. 


The  following  drafts  have  been  cashed  or  received  on  deposit  during  the  day,  and  have 
been  forwarded  to  the  Central  Bank  for  credit:  No.  297,  Call  &  Brown,  dated  Mar.  3,  on 
Marine  N.  B.,  New  York,  for  #450,  indorsed  by  Chase  &  Smith;  No.  625,  First  N.  B.,  Tama 
City,  dated  Mar.  4,  on  Chemical  N.  B.,  New  York,  for  #350,  indorsed  by  Lee  &  Avery;  No. 
532,  Second  N.  B.,  Waterloo,  dated  Mar.  1,  on  Sixth  N.  B.,  Chicago,  for  #700,  indorsed  by  J. 
Draper;  No.  191,  Traders'  Bank,  Omaha,  dated  Mar.  2,  on  Merchants'  N.  B.,  Chicago,  for 
$1,500,  indorsed  by  Henry  Spencer. 

Drew  the  following  drafts  on  the  Central  Bank:  No.  5,  favor  H.  R.  Watkins  #300,  no 
exchange;  No.  6,  favor  H.  R.  Watkins  #200,  no  exchange;  No.  7,  #225,  No.  8,  #375,  favor 
Charles  Jones,  exchange  }£  per  cent;  No.  9,  to  H.  Green,  fav.  M.  Mason,  #127.50,  exchange 
^  per  cent. 

Discounted  the  following  notes  and  bills:     For  C.  Matter,  note  his  favor,  signed  by  J.  Mor- 


PRACTICAL  BANKING 


47 


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gan,  dated  Jan.  3..  due  in  two  months,  #325.  Proceeds  included  on  his  deposit  ticket,  #324.75,  dis- 
count 25c.  For  H.  Jennings,  note  his  favor,  signed  by  S.  Smith,  dated  Feb.  12,  due  in  30 
days,  #800.  Proceeds  cash  #793.47,  discount  #6.53.  For  Lee  &  Avery,  note  their  favor,  signed 
by  Austin  &  Smith,  Vinton,  dated  Feb.  5,  due  in  30  days,  #750,  Proceeds  cash  #748.27,  dis- 
count 73c,  expense  of  collecting  #1.  (Credit  Collection.)  Forwarded  to  First  N.  B.,  Vinton,  to 
collect  for  us. 

Received  for  collection:  For  James  Sumner,  note  signed  by  D.  A.  Minot,  indorsed  by  James 
Dougall,  dated  Feb.  3,  due  in  one  month,  #265.  For  H.  Heald,  note  signed  by  R.  H.  Stacey, 
indorsed  by  M.  Powers,  dated  Feb.  3,  due  in  one  month,  #500.  For  J.  Graves,  his  draft  at  4 
days,  dated  Mar.  4,  on  Stacey  &  Stevens,  Chicago,  #400.  For  J.  Ryan,  his  sight  draft  on  Lane 
&  Co.,  Cedar  Falls,  #275.  [Forwarded  this  draft  to  the  Com.  B.,  of  Cedar  Falls,  to  collect  for 
us.]  For  Chase  &  Smith,  their  sight  draft  on  Ladd  &  Co.,  Chicago,  for  #175.  [Forwarded 
the  two  Chicago  drafts  to  the  Third  N.  B.,  Chicago,  for  collection  and  returns.] 

The  following  checks  on  local  banks  have  been  received  as  cash,  less  collection  charges, 
and  we  have  forvvarded  them  to  the  banks  named,  for  collection:  H.  Parton's  check  No.  29, 
drawn  on  the  Com.  B.,  Vinton,  dated  Mar.  4,  for  #176.50,  indorsed  by  C.  Jennings,  and  identi- 
fied by  C.  Matter;  J.  C.  Lee's  check  No.  193,  drawn  on  the  Union  N.  B.,  of  Mt.  Vernon,  dated 
March  2,  for  #200,  indorsed  by  J.  D.  Atwood.     Collections  deducted  from  these  checks,  #1.50. 

Paid  cash  for  coal  for  heating  office,  #19.  Paid  bookkeeper's  salary,  #20.  Paid  cash  for 
20  shares  ofB.  C.  R.  stock  @  105,  #2,100. 

Received  the  following  deposits  this  day  per  tickets:  E.  C.  James  #229.50,  James  York 
#1 16.95,  Myron  Taft  #228.35,  Howard  &  Payne  #119.25,  C.  Matter  #356.50,  Chase  &  Smith 
#56.50,  Lee  &  Avery  #298.75,  J.  D.  Atwood  #595,  J.  Ryan  #200,  M.  Mason  $137.75,  Charles 
Jones  #2  1  2.50,  for  which  we  gave  our  Certificate  of  Deposit  No.  1. 

Paid  depositors'  checks  per  checks  filed:  M.  Mason  #32.25,  #29.75,  #1  3.75,  #59-255  J-  D 
Atwood  #129.50,  #28.75,  #16.75,  #29.25;  J.  Ryan  #125;  Lee  &  Avery  #228.75;  C.  Matter 
#28.75,  #10.  #29-64;  Howard  &  Payne  #52.25,  #66.80;  E.  C.  James  #100;  Myron  Taft  #116.50. 

The  cash  on  hand  at  the  close  of  the  day  amounts  to  #13,375.13. 


Received  the  following  for  co'lection:  For  H.  Turner,  note  dated  Feb.  17,  time  15  days, 
signed  by  George  Strand,  for  #275;  For  J.  C.  Jones,  his  sight  draft  on  T.  C.  Roberts,  Clear 
Lake,  dated  to-day,  #195.50.  Forwarded  Jones's  draft  to  Union  Bank  of  Clear  Lake  to  collect 
for  us. 


PRACTICAL  BANKING  S3 


Received  from  1st  N.  B.,  Toledo,  their  draft  No.  926  on  Union  N.  B.,  New  York,  dated 
Mar.  5,  for  $374.50,  being  the  amount  of  Miner's  check  sent  them,  4th  inst.,  less  their  charges 
50  cents.     (Credit  1st  N.  B.,  Toledo,  with  $375,  and  debit  Collection  with  50  cents.) 

Received  from  Clinton  Co.  Bank  their  draft  No.  291,  on  Fourth  N.  B.,  Chicago,  dated  Mar. 
5,  for  $599.25,  for  Col.  No.  3,  less  exchange,  and  we  have  this  day  written  a  certificate  of  de- 
posit favor  H.  C.  Cusey  for  the  proceeds,  $598.50,  reserving  the  remainder  for  our  collection  fee. 

Collection  No.  4  paid  to-day,  and  a  certificate  of  deposit  favor  Sumner  has  been  written  for 
the  proceeds,  $264.25 . . .  .Collection  No.  5  paid  to  day,  and  a  certificate  of  deposit  written  favor 
H.  Heald  for  the  proceeds,  $498.75. 

Discount  No.  3  paid  to-day. . .  .Sold  10  shares  B.  C.  R.  Stock  for  cash  @  125,  $1,250. 

Received  from  Com.  Bank,  Vinton,  their  draft  No.  615,  on  1st  N.  B.,  Chicago,  dated 
Mar.  5,  for  $176.23,  being  the  amount  of  Parton's  check  sent  them  5th  inst.,  less  their  charges. 

Forwarded  the  bank  drafts  received  to-day,  to  our  Central  City  correspondent,  as  usua1 

Cusey,  Heald  and  Sumner  have  each  called  and  received  cash  for  the  certificates  of  deposit 
issued  payable  to  them  this  day. 

Received  the  following  deposits  this  day  per  tickets:  J.  D.  Atwood  $96.50,  E.  C.  James 
$50.50,  Lee  &  Avery  $159.50,  M.  Mason  $225.75,  James  York  $96.75,  J.  Burgess  $98.70, 
Howard  &  Payne  $109.50,  Howard  Smith  $350,  for  which  we  gave  our  certificate  of  deposit 
payable  to  Joshua  French;  John  Talt  $375,  for  which  we  gave  our  certificate  of  deposit. 

Paid  depositors'  checks  per  checks  filed:  Chase  &  Smith  $129.50,  $33.75,  $44.25;  E.  C. 
James  $29.75,  $162.25;  J.  D.  Atwood  $29.20,  $45.75,  $33.88,  $169.50;  Lee  &  Avery  $29.75, 
$46.50,  $75;  C.  Matter  $19.20,  $39.85,  $57.75;  Charles  Jones,  certificate  of  deposit,  $212.50. 

Cash  on  hand  at  the  close  of  business  to-day  amounts  to  $14,757.45. 

7 

Received  the  following  deposits  this  day  per  tickets:  James  York  $169.60,  Myron  Taft 
$93.65,  Chase  &  Smith  $229.50,  E.  C.  James  $300,  J.  Ryan  $375,  H.  Sanger  $500,  for  which 
vve  have  issued  our  certificate  of  deposit  in  favor  of  R.  Keyes;  C.  Jenks  $600,  for  which  we  have 
issued  our  certificate  of  deposit  in  favor  of  B.  Parks. 

Paid  depositors'  checks  per  checks  filed:  J.  D.  Atwood  $250,  $125;  J.  Ryan  $500,  $625; 
J.  Burgess  $315.04,  $430.25;  C.  Matter  $220,  $106.31,  $75;  Howard  &  Payne  $56.50,  $45.95; 
M.  Mason  $150,  $225,  $87.90;  Lee  &  Avery  $56.1  3,  $47.1 2;  Chase  &  Smith  $375.  Discount 
No.  2  paid  to-day  by  D.  Ford  $500.  .  .  .Cash  on  hand  at  the  close  of  business  to-day  amounts 
to  $13,835. 

8 

Paid  B.  Parks  to  apply  on  his  certificate  of  deposit  $200,  and  issued  a  new  certificate  of 
deposit  for  the  balance.     Paid  J.  Taft  in  full  of  his  certificate  of  deposit,  $375. 

Collection  No.  9  paid,  and  H.  Turner's  net  proceeds  entered  as  a  certificate  of  deposit  in  his 
avor,  $274,  our  charges  for  collection  being  $1. 

Received  from  Union  Bank  of  Clear  Lake,  their  draft  No.  2621,  on  Tenth  N.  B.,  New  York, 
dated  7th  inst,  for  $194.80,  proceeds  of  collection  No.  10,  sent  them  6th  inst.  We  have  de- 
ducted a  total  collection  fee  of  $1.00,  and  have  written  our  certificate  of  deposit  in  favor  of  Jones 
for  the  proceeds,  $194.50. 

Paid  cash  for  the  following  sight  drafts  on  Central  City  firms,  which  we  have  cashed  less 
charges:  For  A.  Preston,  drawn  on  Stacey  &  Wentworth,  $100,  proceeds  $9950;  for  A. 
Learner,  drawn  on  Lee  &  Somers,  $125,  proceeds  $124.37. 

Remitted  to  the  Central  Bank  for  credit,  the  bank  draft  received  and  the  two  sight  drafts 
discounted  this  day,  the  latter  being  estimated  at  their  face  value. 

Received  the  following  deposits  this  day  per  tickets:  J.  D.  Atwood  $100,  J.  Burgess  $220, 
J.  Ryan,  $256.50,  C.  Matter  $225,  Howard  &  Payne  $125,  Chase  &  Smith  $126.50. 

Paid  depositors'  checks  per  checks  filed:  J.  D.  Atwood  $25.20,  $16.35,  $r  IO-55J  Chase  & 
Smith  $210;  Howard  &  Payne  $105,  $225;  James  York  $227.50,  $49.85;  Myron  Taft  $12.50, 
$37-$o,  $210;  M.  Mason,  $49,  $47.25;  Lee  &  Avery  $29.75,  $48.50;  E.  C.  James  $20,  $123.29. 

Cash  on  hand  at  the  close  of  business  to-day  amounts  to  $12,816.89. 

In  the  illustrated  forms  we  have  given  the  deposit  ledger  for  Monday,  Tuesday,  and  Friday, 
leaving  the  student  to  fill  out  the  intervening  days ;  we  have  also  given  the  continued  trial  bal- 
ances, showing  the  results  of  the  general  ledger  accounts  for  the  first  five  days.    ■ 


54  HIGHER  ACCOUNTING 


II 

Received  of  the  Union  N.  B.,  Waterloo,  their  draft  No.  1256  on  the  Mechanics'  Bank  of 
New  York,  dated  9th  inst,  for  $238.50,  the  proceeds  of  collection  No.  1.  [Debit  Collection  for 
the  balance.]  Wrote  a  certificate  of  deposit  favor  Ravvley  for  the  proceeds  of  above  collection 
after  deducting  75  cents  from  the  face.  The  Union  N.  B.,  Waterloo,  also  sends  us  the  following 
papers  to  collect  for  them,  each  bearing  date  of  the  9th  inst.:  Demand  draft  of  Jones  &  Co. 
on  Carr  &  Smith  of  our  city  for  $96.50;  sight  draft  of  Lane  &  Lewis  on  Bentley  &  Brown  of 
our  city,  for  $125;  draft,  atone  day's  sight,  of  Lane  &  Lewis  on  Davis  &  Evans  of  our  city,  for 
$150.25. 

Received  a  dividend  from  the  B.  C.  Railway  of  $5  per  share  on  10  shares  of  stock  now  on 
hand.  .  .  .Paid  cash  for  postage  and  stationery,  $3.75. 

Received  from  the  College  Bank  of  Iowa  City,  their  draft  No.  2917  on  Merchants'  National 
Bank,  New  York,  dated  9th  inst.,  for  the  proceeds  of  Harting's  check  sent  them  4th  inst.,  after 
deducting  exchange  10  cents. 

Received  cash  on  discount  No.  1,  $500,  and  also  for  interest  on  $500  for  3  days  at  8  per 
cent  per  annum,  and  a  new  note  of  30  days  dated  8th  inst.,  signed  by  R.  C.  Crawford,  in- 
dorsed by  W.  M.  Smith,  for  the  remaining  $500,  receiving  cash  for  the  discount,  (interest  in  ad- 
vance) on  the  new  note  33  days  at  8  per  cent  per  annum. 

Exchanged  one  of  our  office  desks  for  a  larger  one,  paying  $22.50  for  the  difference  in 
price. 

Sold  drafts  on  the  Central  Bank  as  follows:  To  Lee  &  Avery,  favor  Hoyt  &  Sherman, 
$125.20,  receiving  cash  for  the  face  and  for  exchange  15  cents;  to  J.  Burgess,  favor  J.  M.  Bur- 
gess, $107.50,  receiving  cash  for  the  face  and  for  exchange  10  cents. 

Received  the  following  deposits  to-day:  J.  Burgess  $56.50,  E.  C.  James  $119,  Chase  & 
Smith  $72.25,  Myron  Taft  $100,  James  York  $65,  Howard  &  Payne  $100. 

Paid  depositors'  checks  to-day  as  follows:  J.  Ryan  $725, $37.50,  $230;  J.  D.Atwood  $29.75, 
$43.82;  C.  Matter  $115,  $28.50;  Lee  &  Avery  $15;  M.  Mason  $900,  $87.50. 

Certified  checks  for  J.  D.  Atwood,  No.  19  in  favor  of  H.  E.  Sumner  $59.50,  No.  20  in 
favor  of  J.  A.  Bunnel  $40.50. 

Remitted  to  the  Central  Bank  for  credit,  all  bank  drafts  received  to-day. 

The  cash  on  hand  at  the  close  of  business  to-day  amounts  to  $1 1,878.27. 

12 

Paid  cash  for  $12,500  of  the  Electric  Railway  Bonds  at  80  cents  on  the  dollar. 

Received  from  the  First  N.  B.,  Vinton,  their  draft  No.  121  5  on  the  Ninth  N.  B.,  Chicago, 
dated  nth  inst.,  for  the  proceeds  of  discount  No.  5  after  deducting  50  cts.      [Debit  Collection.] 

Received  from  the  Union  N.  B.,  Mt.  Vernon,  their  draft  No.  1856  on  the  First  N.  B.,  Bos- 
ton, for  $199.50,  dated  1  ith  inst.,  for  proceeds  of  Lee's  check  sent  them  5th  inst.  [Make  a 
ticket,  debiting  J.  D.  Atvvood  with  the  balance  of  this  check,  since  you  allowed  Atwood  the  face 
value  of  the  check.] 

Sold  to  the  Electric  Railway  Co.  for  cash,  three  drafts  on  the  Central  Bank,  as  follows: 
Favor  Ryan  &  Co.  $2000,  favor  Lee  &  Grant  $2000,  favor  Kennedy  &  Co.  $2000,  charging  no 
exchange. 

Received  from  the  Third  N.  B.,  Chicago,  their  draft  No.  2917  on  the  Central  Bank  of 
Central  City,  dated  I  ith  inst.,  for  $574.50,  being  the  net  proceeds  of  collections  Nos.  6  and  8. 
[Debit  collection  with  the  difference.]  Charge  for  collection  fee  on  No.  6,  $1,  and  on  No.  8,  50 
cents,  and  credit  the  firms  for  whom  these  collections  were  made  with  the  proceeds  as  deposits. 

Received  payment  of  collections  Nos.  11,12  and  13,  and  forwarded  our  draft  on  the  Cen- 
tral Bank  to  the  First  N.  B.,  Waterloo,  for  the  proceeds  after  deducting  75  cts. 

Received  deposits  as  follows,  in  addition  to  those  already  named:  Myron  Taft  $51,  M. 
Mason  $175,  C.  Matter  $200,  J.  Ryan  $180,  Electric  Railway  Co.  $4000. 

Among  the  above  deposits  the  following  local  checks  on  neighboring  banks  were  received 
and  counted  as  cash,  less  a  total  collection  fee  deducted,  amounting  to  $2.50,  which  should  be 
credited  to  Collection:  H.  Sherman's  check  No.  95  on  Commercial  Bank,  Belleville,  for  $100, 
indorsed  by  Chase  &  Smith;  G.  Preston's  check  No.  39  on  the  Citizen's  Bank,  Wheatland,  for 


PRACTICAL  BANKING  55 


#125,  indorsed  by  M.  Mason;  R.  Smith's  check  No.  42  on  Merchants'  Bank  of  Preston,  for 
#80,  indorsed  by  J.  Ryan.      Forwarded  these  checks  to  the  banks  named,  for  collection. 

Paid  depositors' checks  as  follows:  J.  Burgess  $250,  #137;  Howard  &  Payne  #72.50, 
#22.25.;  Lee  &  Avery  #1  50,  #57;  James  York  #300,  #27.75.  Paid  B.  Parks  for  his  certificate  of 
deposit  #400. 

Certified  checks  for  the  Electric  Railway  Co.,  No.  1  favor  J.  G.  Crisman  #300,  No.  2  favor 
M.  M.  Preston  #200.  Paid  certified  checks  favor  H.  E.  Sumner  #59.50,  favor  J.  A.  Bunnel 
#40.50,  issued  on  the  11th  inst. 

Forwarded  all  bank  drafts  received  to-day  to  the  Central  Bank  for  credit  as  usual. 

The  cash  on  hand  at  the  close  of  business  to-day  amounts  to  #1 1,037.02. 

13 

Paid  cash  for  20  shares  B.  C.  R.  Stock  at  1 10.  ..  .Sold  #5000  of  the  Electric  Railway 
Bonds  at  95  cents  on  the  dollar,  receiving  cash. 

Discounted  notes  and  bills  as  follows:     For  J.  Burgess,  note  his  favor  signed  by  Robert 

Payton,  dated  Feb.  12,  due  in  one  month,  for  #275;  discount  #2.50,  proceeds  paid  in    cash 

For  E.  C.  James,  his  draft  at  2  months  from  date  on  Martin  &  Moore,  Chicago,  dated  Jan.   13, 

for  #300;  discount  #1.75,  proceeds  deposited. For  J.  York,  note  his  favor,  signed  by  Hiram 

Norton,  dated  Mar.  1,  and  due  in  30  days  from  date,  for  #475.50;  discount  #3.50,  and  we  have 
given  him   drafts   on   the   Central   Bank   favor  Lane  &   Lewis  #274.50,  favor  Avery  &  Baker 

#196.75,  charging  as  exchange  on  the  two  drafts,  75  cents .Forwarded  James's  draft  to  the 

Fourth  N.  B.,  Chicago,  to  collect  for  us. 

Cashed  the  following  local  checks  for  C.  Matter  who  has  indorsed  each,  deducting  a  col- 
lection fee  of  #1.75,  from  the  total  amount  of  the  checks:  D.  Dent's  check  No.  37  on  the  Peo- 
ple's Bank  of  Trenton  for  #1 17.50,  E.  Ford's  check  No.  1 19  on  the  Exchange  Bank  of  Albion, 
for  #214.25.     Sent  these  checks  to  the  banks  named,  for  collection. 

Received  from  the  Commercial  Bank,  Cedar  Falls,  their  draft  No.  2919  on  the  Fourth  N. 
B.,  New  York,  dated  12th  inst.,  for  the  proceeds  of  collection  No.  7,  after  deducting  exchange 
50  cents.  [Make  a  deposit  ticket  favor  J.  Ryan,  for  #273.75,  and  a  ticket  crediting  Collection 
for  the  balance.] 

Received  the  following  deposits  in  addition  to  those  of  E.  C.  James  and  J.  Ryan  already 
named:  J.  Burgess  #129,  Myron  Taft  #200,  Lee  &  Avery  #100,  Howard  &  Payne  #90;  B.  F. 
Curtis  #225,  for  which  we  gave  certificate  of  deposit,  and  R.  E.  Sawyer  #170,  for  which  we 
gave  certificate  of  deposit. 

Paid  depositors'  checks  as  follows:  Electric  Railway  Co.  #29.75,  #275,  #50,  #417.75; 
J.  Graves  #11  5,  #27.50;  J.  Ryan  #15.50,  #87.75;  Chase  &  Smith  #300,  #22.75. 

*  Received  the  following  paper  for  collection:  Draft  at  3  days'  sight,  dated  to-day,  drawn 
by  E.  C.James  on  Brown  &  Jones,  of  Elmira,  for  #275.50^0  collect  for  E.  C.  James,  which  we 
have  forwarded  to  the  First  N.  B.,  Elmira,  to  collect  for  us;  note  at  30  days,  signed  by  J.  D. 
Atwood,  dated  Feb.  12,  for  #300,  payable  to  Rogers  &  Lambert  and  indorsed  by  them  to  the 
Fourth  N.  B.,  Chicago,  for  whom  we  collect. 

Paid  cash  for  janitor  work  in  bank,  #3.50. 

Remitted  to  the  Central  Bank  for  credit  all  bank  drafts  received  to-day. 

The  cash  on  hand  at  the  close  of  business  to-day  amounts  to  #12,554.02. 

14 

The  Commercial  Bank  of  Belleville,  has  returned  H.  Sherman's  check  unpaid,  and  we  have 
returned  the  same  to  Chase  &  Smith,  charging  it  as  a  paid  check. 

The  Merchants'  Bank  of  Preston,  has  sent  us  their  draft  No..  916  on  the  Central 
Bank  of  Central  City,  dated  13th  inst.,  for  the  proceeds  of  R.  Smith's  check  after  deducting  ex- 
change 25  cents.     [Debit  this  to  Collection.] 

Discounted  paper  as  follows:  For  J.  D.  Atwood,  note  his  favor,  signed  by  D.  Sherman, 
Central  City,  dated  Jan.  14,  payable  2  months  after  date,  for  #500,  bearing  interest  at  6  per  cent. 
Estimating  interest  to  maturity  #2.50,  and  discount  35  cents,  we  have  given  him  credit  on  de- 
posit for  the  proceeds,  #502.15 For  C.  Matter,  his  sight  draft  on  Miner  &  Mann  of^Central 

City,  dated  to-day,  for  #275. 25,  deducting  as    discount  #1.75,  and  paying  him  the  proceeds  in 


56  HIGHER  ACCOUNTING 


two  bank  drafts,  one  for  $150  payable  to  C.  E.  Jenkins,  one  for  $123  payable  to  R.  A.  Sones, 

the  balance  being  kept  for  exchange .Fcr  Myron  Taft,  note  his  favor,  signed  by  B.  O.  West, 

dated  Mar.  1,  payable  60  days  after  date,  for  $600,  estimating  $6  discount,  we  have  given  him 
credit  on  deposit  for  $300,  and  a  draft  on  the  Central  Bank  for  $293.50,  charging  exchange  50 
cents. 

M.  Stanley  has  paid  collection  No.  2  due  this  day,  and  we  have  deducted  $2.50  for  col- 
lection fee,  selling  G.  Stone  a  draft  on  the  Central  Bank  for  $200,  no  exchange,  and  giving  him 
our  certificate  of  deposit  for  the  balance  of  the  proceeds. 

Exchanged  our  safe  for  a  larger  one,  paying  cash  for  the  difference  in  price,  $75. 

Paid  the  following  checks:  J.  D.  Atwood  $129.50,  $28.83,  $56.50;  James  York  $29,75, 
$14.25;     Chase  &  Smith  $15.50,  $27.60,  besides  the  debit  for  returned  check;  M.  Mason  $150, 

$29.15,  $32.12;  C.  Matter  $32.87,  $15.65;  Electric  Railway  Co.  $287.50,  $485,  $217.25 

Paid  certificate  of  deposit  favor  Joshua  French  $350,  and  certificate  of  deposit  favor  H.  Turner 
$274 Paid  the  check  which  we  certified  on  the  12th  inst,  $500. 

Received  the  following  deposits  besides  the  proceeds  of  the  two  discounts  named  above: 
Chase  &  Smith  $350,  M.  Mason  $100,  James  York  $87.50,  A.  V.  Turner  $250,  for  which  we 
issued  a  certificate  of  deposit. 

Among  the  deposits  to-day  were  the  following  bank  drafts,  which  we  have  remitted  to  the 
Central  Bank,  together  with  all  other  bank  drafts  received  to-day:  Draft  No.  3196  drawn  by  the 
Ninth  N.  B.,  Cleveland,  on  the  Chemical  N.  Bv  Philadelphia,  dated  1  ith  inst.,  for  $300,  indorsed 
by  Chase  &  Smith;  Draft  No.  299  drawn  by  the  People's  Bank  of  Syracuse  on  the  First  N.  B., 
Chicago,  dated  1 2th  inst.,  for  $200,  indorsed  by  A.  V.  Turner. 

The  cash  on  hand  at  the  close  of  business  to-day  amounts  to  $10,591.05. 

15 

The  Citizens'  Bank  of  Wheatland,  sends  us  their  draft  No.  1274  on  the  Third  N.  B.,  New 
York,  dated  14th  inst,  for  $124.50,  being  the  proceeds  of  Preston's  check,  sent  them  for  :ol- 
lection. 

Sold  the  following  drafts  on  the  Central  Bank  for  cash:  To  M.  Mason,  favor  Earl  &  Mar- 
tin, $200,  exchange  25  cents;  to  J.  D.  Atwood,  favor  Smith  &  Moore,  $1 15,  favor  Wright  & 
Hunt,  $175,  exchange  on  the  two  40  cents;  to  E.  C.  James,  favor  self,  $125,  favor  C.  C.  Jen- 
nings, $300,  exchange  on  the  two  75  cents. 

Discounts  Nos.  4  and  7  have  been  paid  to-day. 

Sold  10  shares  B.  C.  R.  Stock  at  130,  receiving  cash. 

Paid  for  bookkeeper's  wages  $50. 

Discounted  the  following  paper  for  our  depositors,  in  each  case  giving  them  credit  on 
deposit  for  the  proceeds:  Fcr  Chase  &  Smith,  note  their  favor  at  30  days  from  Mar.  1 ,  signed 
by  R.  E.  Grant,  for  $300,  estimating  the  discount  $1.25;  for  Howard  &  Payne,  their  draft  at 
30  days  from  Mar.  11,  on  Starr  &  Seeley,  of  Central  City,  for  $250,  estimating  the  discount 
$1.50;  for  James  York,  note  his  favor,  signed  by  A.  R.  Raines,  dated  Feb.  20,  at  30  days,  for 
$400,  estimating  discount  $1.75.  . .  .Forwarded  the  draft  on  Starr  &  Seeley  to  the  Central  Bank 
to  collect  for  us. 

Paid  cash  for  railing  placed  on  bank  counter,  $37.50. 

Sold  $2,000  of  the  Electric  Railway  Bonds  at  100  cents  on  the  dollar. 

Cashed  the  following  sight  drafts  on  Central  City  firms:  R.  E.  Martin's  draft  on  Crone  & 
Dailey  for  $275,  C.  A.  Carter's  drafc  on  Strong  &  Black  for  $225,  both  of  these  drafts  being  in 
favor  of  J.  D.  Atwood  who  endorsed  them  to  us,  receiving  cash  for  the  proceeds  after  deduct- 
ing a  collection  charge  of  $2.50. 

Forwarded  all  bank  drafts  received  to-day  with  the  two  sight  drafts  last  named,  to  the 
Central  Bank  for  credit. 

Received  other  deposits  besides  those  of  Chase  &  Smith,  Howard  &  Fayne,  and  James 
York  already  named,  as  follows:  J.  Burgess  $75,  M.  Mason  $122,  C.  Matter  $1 19.50,  Lee  & 
Avery  $129.50;  Henry  Bennett  $200  for  which  we  issued  certificate  of  deposit,  George  Strand 
$300  for  which  we  issued  certificate  of  deposit. 


PRACTICAL  BANKING  57 


Paid  depositors'  checks  as  follows:  J.  D.  Atwood,  $129.17,  $22.33;  E-  C.  James,  $73 .50, 
$22.18,  $212.75;  J.  Ryan,  $129.16,  $225;  J.  Graves,  $29.15,  $102.10;  Myron  Taft,  $113.12, 
$38.15,  $26.23;  Electric  Railway  Co.,  $519.50,  $237.75,  $126.19;  and  we  have  also  paid  cer- 
tificates of  deposit  favor  R.  Keyes,  $500,  favor  J.  C.  Jones,  $194.50. 

The  cash  on  hand  at  the  close  of  business  today  amounts  to  $13,542.67. 

The  student  may  now  make  a  financial  statement  showing  (1)  The  total  resources,  using 
the  ledger  balances  and  the  following  inventories: 

20  shares  of  B.  C.  R.  Stock  worth  $112.50  per  share;  $5500  of  Electric  Railway  Bonds, 
worth  100  per  cent;  Office  Furniture  now  worth  $700;  Books  and  Stationery  worth  $125;  we 
owe  on  Salaries  $27.50,  on  Rent  $75. 

(2)  The  total  liabilities  other  than  gains. 

(3)  The  net  gain. 

(4)  The  gain  distributed  as  follows:  5  per  cent  to  dividends,  J}£  per  cent  to  surplus,  and 
the  remainder  to  undivided  profits. 

Close  the  ledger  in  accordance  with  the  above,  entering  the  inventories  to  the  respective 
accounts  in  red  ink,  the  losses  or  gains  also  in  red  ink,  ruling  the  accounts  and  carrying  inven- 
tory balances  below  the  ruling.  Use  the  folio  columns  of  ledger  accounts  for  explanations. 
Foot  the  debit  and  credit  columns  of  each  ledger  account  closed.  Open  an  account  with  Loss 
and  Gain  and  carry  to  it  the  losses  and  gains  from  the  several  accounts.  Having  found  the  net 
gain,  enter  in  red  ink  in  the  debit  column  the  three  divisions  to  which  it  is  to  be  carried,  and 
rule  the  account. 

Open  accounts  with  Dividends,  Surplus,  and  Undivided  Profits  and  carry  the  respective 
divisions  of  the  gains  to  these  accounts. 

Take  a  trial  balance. 

The  dividend  account  will  be  charged  as  the  dividends  are  paid  to  the  respective  investors. 

The  surplus  account  will  remain  to  augment  the  working  capital. 

The  undivided  profits  account  will  remain  without  change  until  another  division  of  the 
gains  and  losses. 

Questions  on  Practical  Banking. 

1.  Into  what  four  departments  is  banking  ordinarily  divided? 

2.  What  is  understood  by  Deposits?  Exchange?  Discounts?  Collections? 

3.  Describe  the  ticket  system  of  recording  entries. 

4.  What  is  the  office  of  the  teller  ?  the  bookkeeper  ?  the  cashier  ? 

5.  Name  eight  auxiliary  books  used. 

6.  Name  the  three  essential  books. 

7.  Describe  the  depositors'  balance  ledger ;  the  cash  book  ;  the  general  ledger. 

8.  How  is  discount  computed  on  notes  ? 

9.  How  should  collections  be  entered  ? 

10.  How  is  a  fund  kept  in  the  central  bank,  against  which  to  draw  drafts  ? 

1 1.  How  is  the  petty  ledger  used  ? 

12.  What  is  meant  by  certification  of  checks?     What  entries  are  made  when  a  check  is 
certified  ? 

13.  What  is  a  certificate  of  deposit? 

14.  How  often  is  the  trial  balance  taken? 
1  5.     Describe  a  bank  statement. 

16.     What  must  be  determined   with  reference  to   all  real  and  personal  accounts  in  any 
business,  before  the  present  worth  can  be  shown  ? 


Corporation  Accounting. 


The  division  of  the  capital  stock  of  a  business  concern  into  equal  shares  provides  a  unit, 
the  share,  for  the  measure  of  the  respective  interests  of  the  investors.  Joint  stock  accounting 
has  to  do  with  the  records  of  these  shares.  A  partnership  may  divide  its  capital  stock  into 
shares  and  become  a  joint  stock  company.  Such  companies  are  regulated  by  the  statutes  of 
the  states  in  which  they  are  located. 

The  capital  stock  of  corporations  conducted  for  pecuniary  gain  is  divided  into  equal  shares. 
These  shares  are  owned  by  the  stockholders,  each  of  whom  has  a  greater  or  less  interest  in  the 
business,  depending  upon  the  number  of  shares  in  his  possession.  The  records  of  the  different 
transactions  affecting  these  shares  are  given  in  this  set.  So  far  as  the  bookkeeping  records  are 
concerned,  the  corporation  accounting  is  identical  with  the  accounting  of  a  joint  stock  company 
which  may  or  may  not  be  incorporated. 

Three  or  more  persons  are  required  to  organize  a  corporation,  the  number  being  determined 
by  the  statutes  of  the  state  where  the  corporation  is  organized.  These  persons  decide  on  the 
kind  of  business  to  be  conducted,  the  amount  of  capital  required,  the  amount  that  each  binds 
himself  to  contribute,  and  the  place  of  business.  Their  action  is  reported  by  their  secretary  to 
the  proper  state  official,  and,  if  all  legal  requirements  are  complied  with,  a  charter  or  license  is 
given  by  state  authority  which  permits  the  organizers  in  the  form  of  a  corporate  person  to  issue 
shares  of  stock,  and  in  exchange  for  these  shares  receive  cash  or  other  property  from  the 
persons  who  are  to  become  stockholders. 

A  stockholder  becomes  such  by  paying  or  obligating  himself  to  pay  for  a  certain  number 
of  shares.  He  may  pay  in  full  or  in  installments  as  the  directors  of  the  company  shall  deter- 
mine. He  may  transfer  his  shares  to  another  person  and  thus  cease  to  be  interested  as  an 
investor  in  the  corporation.  So  long  as  he  retains  his  stock,  he  is  entitled  to  his  proportionate 
amount  of  the  profits  in  dividends,  and  subject  to  his  proportionate  amount  of  assessments, 
should  there  be  any  against  the  stock. 

The  entries  pertaining  to  the  purchase,  transfer,  payment  by  installment,  issuance  and 
retirement  of  stock,  in  their  relation  to  the  individual  stockholders  are  kept  in  a  special  set  of 
books,  separate  from  the  general  books  of  the  business.  From  the  stock  books  the  aggregates 
that  concern  the  general  business  are  carried  to  the  general  books. 

The  Books  Used. 

The  Minute  Book,  kept  by  the  secretary,  records  all  meetings  of  the  board  of  directors 
and  the  stockholders.  It  furnishes  official  memoranda  of  all  proceedings,  while  some  of  the 
proceedings  may  also  require  book  entries. 

The  Stock  Journal.  This  important  book  contains  consecutive  entries  of  all  transactions 
pertaining  to  the  stockholders  as  such.  A  corporate  existence  is  expected  to  extend  over 
many  years.     Transfers  of  stock  and  payments  on  stock  may  be  numerous,  and  frequently  the 

-58- 


CORPORATION  ACCOUNTING  59 


relations  of  stockholders  become  involved.  A  clear,  consecutive  journal  record  is  the  best 
form  of  reference  to  settle  possible  differences  among  stockholders.  The  journal  is  ruled  in  four 
columns,  two  for  the  debits  and  credits  passing  to  the  stock  ledger,  and  two  for  the  debits  and 
credits  derived  therefrom  that  are  carried  to  the  general  books. 

The  Stock  Ledger  contains  a  page  account  with  each  stockholder,  ruled  in  such  a  way 
as  to  show  the  number  of  shares  held  by  each,  the  amount  paid  on  these  shares,  the  transfers, 
etc.     It  is  conveniently  ruled  as  shown  in  the  form  on  page  9. 

The  Installment  Certificate  Book.  When  stock  is  to  be  paid  in  installments,  each 
payment  on  stock  is  receipted  for.  The  special  form  of  receipt  is  called  Installment  Certificate 
or  Installment  Scrip.  The  installment  blanks  are  kept  in  a  book  with  stubs.  Entries  from 
these  stubs  are  journalized  and  posted  to  the  stock  ledger.  When  installment  certificates  are 
issued  to  the  paid  up  or  par  value  of  the  stock,  the  holder  returns  them  and  receives  in  exchange 
certificates  of  stock. 

The  Stock  Certificate  Book.  This  book  is  similar  in  form  to  the  installment  certifi- 
cate book;  certificates  of  stock  are  issued  to  those  who  have  made  full  payment  for  their  shares. 
Journal  entries  are  made  from  the  stub  of  this  book  and  from  thence  are  posted  to  the  stock 
ledger. 

The  Transfer  Book  contains  blank  assignment  forms  to  be  filled  by  stockholders  who 
desire  to  transfer  their  stock  to  other  persons.  Thus,  the  secretary  is  given  authority  to  cancel 
certain  certificates  and  issue  other  certificates  to  other  persons.  Another  method  of  transferring 
stock,  now  commonly  used,  is  to  make  an  assignment  on  the  back  of  the  certificate,  a  blank 
form  for  this  purpose  being  printed  on  the  certificate. 

Other  Forms  Used. 

Articles  of  Incorporation.  The  proposed  incorporators  draw  up  articles  of  incorpora- 
tion, very  much  like  the  constitution  of  a  society,  giving  the  name,  object,  amount  of  capital, 
officers  and  method  of  management,  and  such  restrictions  and  limitations  as  they  desire.  These 
articles  are  recorded  in  their  own  county,  and  also  in  the  capital  of  their  state,  after  which  a 
charter,  or  authority  to  transact  business  is  issued  by  the  state  department.  Certain  kinds  of 
corporations  require  a  charter  to  be  granted  by  special  act  of  the  legislature  of  the  state. 

The  Subscription  List  is  the  agreement  between  the  original  incorporators  signed  by 
each.  It  binds  them  to  take  and  pay  for  the  number  of  shares  there  agreed  upon.  If  any 
subscriber  fails  to  fulfill  his  agreement,  this  form  may  be  made  the  basis  of  a  legal  action  to 
compel  him  to  do  so.     See  form  on  page  5. 

Installment  Lists.  These  are  made  out  from  the  stock  ledger  as  installments  are  called 
in  by  the  directors.  Columns  are  provided  for  the  subscriber,  number  of  shares,  amount  of  in- 
stallment, when  paid,  etc.     See  form  on  page  9. 

Care  of  Papers. 

In  the  organization  and  management  of  a  corporation,  certain  forms,  such  as  the  subscrip- 
tion list,  installment  lists,  dividend  lists,  etc.,  may  be  made  on  loose  sheets  of  paper.  Many 
prefer  to  make  them  in  this  way,  as  it  is  difficult  to  find  blank  forms  exactly  suited  to  every 
case.  When  loose  sheets  are  used,  they  should  be  pasted  carefully  in  the  minute  book,  so  that 
they  may  not  be  mislaid. 

Practice  in  Joint  Stock  Entries  for  Corporations. 

A  number  of  persons  desiring  to  form  a  corporation  for  the  purpose  of  manufacturing  and 
selling  watches,  hold  a  preliminary  meeting  and  decide  to  incorporate  with  a  capital  of  $400,000. 
A  stock  subscription  list  is  opened  and  signed  by  persons  as  shown  below.  They  agree  thereby 
to  take  the  number  of  shares  set  opposite  their  names. 

The  minutes  of  the  secretary  for  the  first  meeting,  the  subscription  list,  the  minutes  of  the 
second  meeting  and  the  articles  of  incorporation  should  be  copied  by  the  student. 


60 


HIGHER  ACCOUNTING 


Subscription  List. 

Cedar  Rapids,  Iowa,  Feb.  15,  igoo. 
We,  the  undersigned,  hereby  subscribe  for  the  number  of  shares  set  opposite  our  names  in 
the  Union  Watch  Company,  a  corporation  organized  under  the  laws  of  the  State  of  Iowa,  with 
an  authorized  capital  of  Four  Hundred  Thousand  Dollars  ($4.00,000),  divided  into  four 
thousand  (4.000)  shares  of  One  Hunderd  Dollars  ($100)  each;  and  agree  to  pay  the  calls  made 
on  such  stock  as  they  may  be  made  by  the  Directors  of  the  Company, 


Number  of  Shares. 


One   thousand. 


Five  hundred. 


Five  hundred. 


One  hundred. 


One  hundred. 


One  hundred . 


Four  Jiundred 


Amount 


Tivo  hundred  and  fifty 


Fifty 


Eighty 


Five. 


$100,000 


50,000 


50,000 


10,000 


10.000 


10,000 


40,000 


25,000 


5,000 


8,000 


500 


$308,500 


Name 


2*-^^>£^ 


C^^r^^^^^z^^— > 


astM^ 


/o^-tx^i^  I   J  sJjL^H^W  6 


Residence 


Cedar  Rapids,  Iowa. 

(<  «<  H 

tt  <<  «« 

«<  «  « 

Marion,  Iowa. 

U  ft 

Iowa  City,  Iowa. 
New  York  City,  N.  Y 
Chicago,  III. 
Dubuque,  Iowa. 
Des  Moines,  Iowa. 


The  certification  of  this  stock  agreement  by  a  notary  public  is  given  on  page  61. 


CORPORATION  ACCOUNTING  61 

Before  me,  a  Notary  Public  in  and  for  the  County  of  Linn,  State  of  Iowa,  personally  came 
A.  H.  Norton,  C  A.  Hawley,  Joseph  Davis,  Mrs.  D.  M.  Johnston,  C.  C.  Sweeney,  James  Fitz- 
patrick,  Duncan  McGregor,  T.  B.  Summers,  John  J.  Gill,  James  Drummond,  and  Daniel  Bennett, 
the  persons  whose  names  are  hereunto  recorded,  and  who  in  my  personal  presence  voluntarily  signed 
the  same,  as  subscribers  for  stock  in  the  Union  Watch  Company,  to  the  amounts  set  opposite  their 
names  in  the  foregoing  Stock  Subscription  Agreement. 

In  witness  whereof,    I  have  hereunto  set  my  name  and  the  official  seal  of  my  office,  at  the 
City  of  Cedar  Rapids,  County  of  Linn,  State  of  Ioiva,  this  fifteenth  day  of  February,  ipoo. 


[seal] 

Notary  Public. 
Minutes  of  the  First  Meeting. 

Cedar  Rapids,  Iowa,  Feb.  15,  1900. 

Upon  the  above  date  the  proposed  incorporators  of  the  Union  Watch  Company  held  a 
meeting  at  the  office  of  A.  H.  Norton,  in  the  city  of  Cedar  Rapids,  Iowa,  for  the  purpose  of 
attaching  their  signatures  to  a  Stock  Subscription  List,  and  for  the  purpose  of  taking  steps  for 
the  permanent  and  legal  organization  of  the  company. 

There  were  present  A.  H.  Norton,  Joseph  Davis,  C.  A.  Hawley,  C.  C.  Sweeney,  James 
Fitzpatrick,  Duncan  McGregor,  John  J.  Gill,  and  A.  Student. 

A.  H.  Norton  was  elected  chairman,  and  A.  Student,  secretary.  The  chairman  then  an- 
nounced that  promises  had  been  secured  for  subscription  of  the  stock  of  the  proposed  corpora- 
tion and  he  suggested  that  before  proceeding  further,  the  incorporators  present  attach  their 
signatures  to  the  stock  subscription  list,  and  that  the  same  be  duly  certified  to,  and  made  a 
part  of  the  company  records.  The  suggestion  was  complied  with,  and  subscriptions  of  stock  to 
the  amount  of  Three  hundred  eight  thousand  five  hundred  dollars  (#308,500),  were  duly  signed 
and  certified. 

Moved  by  Mr.  McGregor  that  a  committee  of  three  incorporators  be  appointed  by  the 
chairman  to  prepare  articles  of  incorporation,  said  committee  to  make  its  report  at  a  meeting  to 
be  subsequently  called  by  the  chairman.  The  motion  was  carried  and  the  following  gentle- 
men were  appointed  by  the  chairman  to  serve  on  such  committee:  Duncan  McGregor,  C.  A. 
Hawley,  and  James  Fitzpatrick. 

After  further  informal  discussion  of  the  prospects  and  affairs  of  the  proposed  company,  the 
meeting  was  adjourned  subject  to  the  call  of  the  chairman. 

Approved  Feb.  1 8,  1 900. 

A.  H.  Norton,  President.  A.  Student,  Secretary. 

Minutes  of  the  Second  Meeting. 

Cedar  Rapids,  Iowa,  Feb.  18,  1900. 

Upon  call  of  A.  H.  Norton,  Chairman,  the  proposed  incorporators  of  the  Union  Watch 
Company,  held  a  meeting  at  the  office  of  A.  H.  Norton  to  consider  the  report  of  the  committee 
on  incorporation  appointed  at  last  meeting. 

The  minutes  of  the  previous  meeting  were  read  and  approved. 

Mr.  McGregor,  chairman  of  the  committee,  read  the  articles  of  incorporation  and  moved 
their  adoption.  C.  A.  Hawley  seconded  the  motion.  After  discussion,  the  Articles  of  Incorpora- 
tion hereafter  written  were  unanimously  adopted. 

On  motion  of  James  Fitzpatrick,  seconded  by  C.  C.  Sweeney,  the  secretary  was  directed  to 
see  that  the  Articles  of  Incorporation  be  duly  recorded  by  the  county  recorder  and  secretary 
of  state  and  that  notice  of  same  be  published  as  provided  by  law.    Motion  carried. 

Meeting  adjourned  subject  to  call  of  the  president. 

A,  Student,  Secretary. 

[To  be  approved  at  the  third  meeting.] 


62  HIGHER  ACCOUNTING 


Articles  of  Incorporation  of  the  Union  Watch  Company, 
of  Cedar  Rapids,  Iowa. 

We,  the  undersigned,  desiring  to  form  ourselves  into  a  body  corporate  under  the  laws  of 
the  state  of  Iowa,  do,  for  this  purpose  adopt  for  our  organization,  and  as  a  basis  for  said  in- 
corporation, the  following  Articles  of  Incorporation: — 

Article  I. 

The  name  of  this  corporation  shall  be  The  Union  Watch  Company  and  its  principal  place 
of  business  shall  be  Cedar  Rapids,  in  the  county  of  Linn,  state  of  Iowa. 

Article  II. 

The  purpose  for  which  this  corporation  is  formed  is  the  manufacture  and  sale  of  watches, 
assembled  and  in  parts,  also  jewelry  and  material  of  similar  construction,  both  wholesale  and 
retail,  also  the  acquisition  of  lands,  buildings,  machinery,  and  such  other  property  as  may  be 
necessary  for  carrying  on  the  said  business,  and  to  do  such  other  acts  as  are  necessary  for  the 
management  of  said  business. 

Article  III. 

The  amount  of  the  capital  stock  of  said  corporation  shall  be  Four  Hundred  Thousand  Dol- 
lars (#400,000)  to  be  divided  into  four  thousand  (4000)  shares  of  One  Hundred  Dollars  ($100) 
each,  the  same  to  be  issued  only  when  paid  for  in  cash  or  its  equivalent. 

Article  IV. 

This  corporation  shall  be  deemed  in  legal  existence  and  its  officers  qualified  to  do  business 
in  its  name  from  and  after  the  filing  of  these  Articles  of  Incorporation,  in  the  office  of  the  Sec- 
retary of  State  for  the  state  of  Iowa,  due  notice  of  the  same  having  been  received  by  the  corpora- 
tion secretary  and  shall  continue  in  existence  thereafter  for  the  period  of  twenty-five  years  un- 
less sooner  legally  dissolved. 

Article  V. 

The  officers  of  this  corporation  shall  comprise  a  President,  a  Vice-President,  a  Secretary,  a 
Treasurer,  a  board  of  five  Directors,  two  of  whom  shall  be  the  President  and  Secretary  of  the 
corporation,  who  shall  serve  as  President  and  Secretary  of  the  Board  of  Directors,  respectively. 
These  officers  shall  be  chosen  at  the  regular  annual  meeting  of  the  corporation  and  their  terms 
of  office  shall  continue  until  their  successors  have  been  chosen  and  qualified. 

The  duties  of  said  officers  shall  be  such  as  may  be  prescribed  by  the  by-laws  of  the  cor- 
poration, to  be  hereafter  adopted  by  said  board  of  directors,  as  hereafter  provided  for. 

Article  VI. 

The  affairs  of  this  corporation,  in  so  far  as  they  are  not  regulated  by  these  articles  of  in- 
corporation or  by  majority  vote  of  the  incorporators  at  any  legal  meeting,  shall  be  under  con- 
trol of  the  board  of  directors,  who  shall  hold  meetings,  adopt  by-laws,  and  take  such  action 
relative  to  the  affairs  of  the  company,  as  may  seem  to  them  advisable. 

Article  VII. 

The  regular  annual  meetings  of  this  corporation  shall  occur  on  the  second  Tuesday  in 
January  of  each  year,  at  such  place  and  hour  as  may  from  time  to  time  be  designated  by  the 
board  of  directors.  Until  the  occurrence  of  the  first  annual  meeting  on  the  second  Tuesday  of 
January,  1901,  the  following  persons  are  hereby  elected  to  serve  in  the  offices  designated: — 

President — A.  H.  Norton. 

Vice-President — Duncan  McGregor. 

Secretary — A.  Student. 

Treasurer — Joseph  Davis. 

Directors — A.  H.  Norton,  T.  B.  Summers,  Joseph  Davis,  Duncan  McGregor,  A.  Student. 


CORPORATION  ACCOUNTING 


63 


Article  VIII. 
The  greatest  amount  of  indebtedness  for  which  this   corporation  shall  make  itself  liable, 
shall  not  at  any  time  exceed  two-thirds  of  the  capital  stock. 

Article  IX, 
These  articles  of  incorporation  may  be  amended  at  any  regular  meeting  or  at  any  meeting 
called  for  that  purpose,  by  a  two-thirds  majority  of  all  stock  voted. 
Witness  our  hands  this  18th  day  of  February,  1900. 


A.  H.  Norton, 
C.  A  Hawley, 
James  Fitzpatrick, 
T.  B.  Summers, 


STATE  OF_ 
County  of 


Iowa 


Linn 


ss. 


Joseph  Davis, 
Mrs.  D.  M.  Johnston, 
John  J.  Gill, 
Daniel  Bennett, 


On  this        18        dav   0f 


C.  C.  Sweeney, 
Duncan  McGregor, 
James  Drummond. 


February, 


19    00 


before  me,   a       Notary  Public       [n  an(j  for  sai(j  County  personally  appeared -4.  H.  Norton, 


C.  A.  Hawley,     James  Fitzpatrick,     T.  B.  Summers,     Joseph  Davis,     Mrs.  D.  M.  Johnston,   John  J.  Gill, 

Daniel  Bennett,    C.  C.  Sweeney,   Duncan  McGregor,    and  James  Drummond. 

known  to  me  to  be  the  persons  named  in  and  who  executed  the  foregoing  instrument,  and  severally 
acknowledge  that  they  executed  the  same  freely  and  voluntarily,  and  for  the  intents  and  purposes 
therein  contained  and  mentioned. 


\   SEAL   Y 


John  J.  Garton 


Notary  Public. 


The  above  forms  are  representative  of  the  secretary's  records.  In  the  following  work,  attention 
will  be  directed,  principally,  to  the  entries  involved  in  the  issuance,  transfer  and  sale  of  stock,  dividends, 
assessments,  etc. 

March  1,  1900. 

By  referring  to  subscription  list,  it  will  be  found  that  of  the  authorized  capital  stock  of 
#400,000,  there  has  been  subscribed  #308,500,  leaving  #91,500  not  definitely  placed.  An 
account  should  be  opened  with  Unsubscribed  Stock  to  be  charged  with  the  amount  not  placed, 
and  credited  as  other  subscriptions  are  received.  Three  general  ledger  accounts  will  be  in- 
volved in  the  opening  entry. 

Stock  Journal  Entry. 


Date 

£b/. 

/7/r  Stbc/r  Ledger  Cn 

fir  Crpn'/Lecfqer  Cr. 

/  700 

/ 

C^^^i^L^^^^^^^t^^^^ 

0*fS*0 

<^W^^Cs£^^^ 

f/J~00 

<^^<i^^2^^^^ 

</t?0  00a 

7    /  — ^— 

<&£~^  ^£~^*£t^Z^^*&5^ 

, 

1     <r 

■ 

64 


HIGHER  ACCOUNTING 


Open  accounts  with  the  subscribers  in  the  stock  ledger  giving  one-third  of  a  page  to  each. 
As  no  payments  have  been  made,  no  entries  are  to  be  posted,  but  in  the  explanatory  space  of  each 
account  enter  in  memorandum  from  the  subscription  list  the  number  of  snares  subscribed  for  by 
each  as  shown  below. 

Stock  Ledger  Account. 


^^^^L^^>^^ 


77s3  +  * 

/lx jbta.tr  at  ion 

J?  e  bits 

Cr  eetcts 

^dosLa-nca-S 

jja.Lt, 

„/»-o. 

Shares 

/f  m  outr't 

/Yo. 

■Sha^ei 

A  trt  o  urft: 

A>o. 

A  trt  e  u  1-ftT 

/ 

-<     \* 

ftoo 

^ 

'000 

>> 

1 

1 

The  above  stock  ledger  account  credits  A.  H.  Norton  with  1000  shares  of  stock  on  which  nothing 
has  been  paid.  As  payments  are  made,  the  amount  actually  paid  in  should  show  in  the  balance 
column.  As  each  subsequent  entry  is  made,  the  number  of  shares  should  be  brought  down  showing 
at  a  glance  the  number  of  shares  held  and  their  paid  up  value. 

March  5,  1900. 

The  board  of  directors  of  the  Union  Watch  Co.  order  a  first  installment  of  25  per  cent  of 
the  subscription   paid  in.     Prepare  installment   list  No.   1  as  shown  below,  with  exception  of 
payment  column  which  is  to  be  filled  in  when  payments  are  made. 


^g,^^^ 


/ 


&£3& 


jja.it  ofCa.U 

Subscrijbtiotr 

sVo  of 
Sh  a-rei 

lf75ta.il/7tt, 

Interesi 

/rm't.  Pa.icL 

J? en?  arks. 

,r 

^Z^y^i^z^f-^^^^-^?^ 

/too 

Xfff  00 

Xie  0  0 

J  ft 

lyfot 

1  >  ' 

S~o  0 

lyftc 

■  \ 

/  0  j 

yfe  t 

(S-<£>.  ^£t*A-f  j?  ^r>  J  vy 

100 

yfoe 

rs'e* 

fyuuLA/  J^_     /  fo  O 

Cf  s7l<>^*  ^S-^J^f^f^J^y 

/// 

>fd  c 

#00 

ht  00 

/  0  0  0  0 

yji^^-^/foe 

J* 

ivfj 
\y{o 

/f. 

3a£ 

J  0  0  0 

'feJL&AJ^z) 

ft 

7000 

f 

/v/ 

i  0  ?f 

77  ivf 

I 

. 

CORPORATION  ACCOUNTING 


65 


The  installments  of  A.  H.  Norton,  Duncan  McGregor  and  C.  C.  Sweeney  are  paid  in  cash. 
Mark  the  payments  in  installment  list  and  issue  installment  script  or  certificates  to  each  as 
shown  in  model  below. 

Installment  Certificate. 


INSTALLMENT  CERTIFICATE         1 
No.../. I  e 

Installment  No.../. 

♦  ° 
Per  Cent J.^C......                             |  • 

No.  ofShara/jZ.f.J?- 

«   (0 
Amount.  t^.^J?. '/?.<?...  *   Id 

♦  ai 

Keceived  the  attached  Certificate  I   <■ 

'  is 

.<Z£&2L*^&!ttS...         I  % 


;«»«««♦»♦»♦«•♦«»«♦«♦♦♦♦♦♦♦♦«♦♦«♦♦♦♦♦♦♦♦♦♦♦♦♦*♦♦♦♦♦♦♦♦♦♦♦♦♦«♦♦♦♦♦♦♦♦♦♦♦♦♦♦♦♦♦♦♦♦♦♦♦♦« 


Amoun 


t.  Szzj^J. 


00<? 


Installment  Certificate  No.^L. 

...Issued  Ay... 


/*  a  0  Shares.  ! 


THE  UNION  WATCH  COMPANY 


Cedar  rapids,  iowa.  . 

This  Certifies  That- 
ha^isp^ie^credit  in  the  treasury  of  this  Company  the  sum  of 


27z?z^-^&~r 


moL 


—DOLLARS, 


the  same  being  tltt^fd^mstullment  ofJL£p~er  cent  of/.4?j?J?..shares  due,  '/Yl4l^rr\£^.J90<2... 

This  Certificate  is  transferable  only  on  the  books  of  this  Company,  upon  surrender  of  same  by  the  holder  or 
his  lawful  representative. 

IN  EVIDENCE  MfEREOF  wehave  duly  affixed  our  signatures  and  the  corporate  seal 
th  is  /fo*-^3*£s.  s/^ ;  aoa. 

Secretary.         _.j^^S^^<0=^^^2&/-. President. 


•  ••••••A****.******************************************)********-********************* 


As  the  certificates  will  not  be  used  in  this  set,  we  will  give  in  the  historical  memoranda 
the  data  for  each  certificate  for  entry  in  the  stock  journal  and  stock  ledger.  Installment  certifi- 
cates have  been  issued  as  follows:  No.  i  to  A.  H.  Norton  for  525,000,  No.  2  to  C.  C.  Sweeney 
for  ^2,500,  No.  3  to  Duncan  McGregor  for  $  10,000. 

Make  these  entries  in  journal  as  shown  below: — 

1  Stock  Journal  Entry. 


TfV9 


^^/ 


l/gv/V 


#i  >y> 


<^^^<^^-^^^-^ 


3-.-r*y„ 


2 \jf~~*  tr . 


^r 


«2^C3£ 


2^f~<?  0 


'Zbi^&^*^  3  >s-'¥'. 


/  0  /> . 


&^*-*f.   /.  .?  .  U.     -^k^^. 


The  student  need  not  post  the  entries  to  the  general  ledger,  as  they  do  not  now  concern 
the  work  before  us.  Post  the  credits  to  stock  ledger  accounts.  The  first  payment,  A.  H.  Nor- 
ton, is  posted  to  his  stock  account  as  per  second  entry  in  form  below: — 


Stock  Ledger  Account. 


r^J^?^ 


T)~+* 

EIxfrLancitL  on. 

Debits 

Cr~e  etc  tS 

3a,L*-nce$ 

Mute 

SnZ'res 

Amount: 

ShO'Vi 

Amount 

Amou  fit 

/?0  0 

-  / 

W*6 

+- 

•* 

'0  a  a 

& 

** 

7jT#  0  0 

'f?6 

'XJl?  0  0 

66 


HIGHER  ACCOUNTING 


March  7,  1900. 

C.  A.  Hawley,  Joseph  Davis,  James  Fitzpatrick  and  Daniel  Bennett  each  pays  cash  for  his 
first  installment,  receiving  certificates  Nos.  4,  5,6,  and  7  in  the  order  given. 

Mark  date  of  payment  on  installment  list,  journalize,  and  post  to  stock  ledger. 

The  directors  decide  to  require  6  per  cent  interest  added  to  the  amount  of  all  the  first  in- 
stallments paid  after  March  10. 

March  27,  1900. 

John  J.  Gill  and  James  Drummond  each  pay  their  first  installments  with  interest  from 
March  10  to  March  27  at  6  per  cent,  receiving  certificates  Nos.  8  and  9.  T.  B.  Summers  pays 
#3000  of  his  assessment,  agreeing  to  pay  the  remainder  next  week,  receiving  certificate  No.  10. 

The  interest  credited  will  not  be  entered  in  the  certificate  of  installment.  T.  B.  Summers'  inter- 
est will  not  be  computed  until  he  pays  the  remainder  of  his  installment.    Entries  as  below. 

Stock  Journal  E.ntry. 


March  30,  1900. 

The  remaining  two  subscribers  have  paid  the  first  installment  in  full  together  with  interest 
on  deferred  payment  from  March  10,  at  6  per  cent,  Summers  receiving  certificate  No.  11  and 
Mrs.  Johnston  receiving  certificate  No.  1 2. 

In  computing  interest  on  Summers's  deferred  payments,  estimate  interest  on  $6250  from  March  10 
to  March  27,  and  on  $3250  from  March  27  to  March  30. 

April  4,  1900. 

Of  the  unsubscribed  stock,  J.  B.  Caldwell  has  subscribed  for  300  shares  and  C.  S.  Benning 
ton  for  50  shares,  each  paying  the  first  installment  of  25  per  cent  with  interest  on  same  at  6  pe 
cent  from  March  10.     Their  subscriptions  are  subject  to  subsequent  calls  for  installments  the 
same  as  other  shares.     Caldwell  receives  certificate  No.  13  and  Bennington  No.  14. 

This  transaction  requires  entry  in  installment  list  No.  1,  and  in  stock  journal. 
Subscriptions  should  be  charged  and  Unsubscribed  Stock  credited  with  face  of  stock;  afterward, 
charge  Cash  and  credit  Subscriptions  and  Interest. 

March  1.  1901. 

The  board  of  directors  called  a  second  installment  of  10  per  cent  of  all  stock  subscribed. 
Make  out  installment  list  No.  2.  Interest  at  6  per  cent  per  annum  is  ordered  collected  on  all 
payments  made  after  March  5,  interest  dating  from  March  1.  In  computing  interest,  count 
exact  days. 

Cash  is  received  in  full  of  second  installments  from  Joseph  Davis,  A.  H.  Norton,  James 
Fitzpatrick,  T.  B.  Summers,  and  C.  S.  Bennington,  and  certificates  Nos.  15,  16,  17,  18,  and  19 
are  issued  in  the  order  given. 

Mark  date  of  payment  on  installment  list,  journalize,  and  enter  in  stock  ledger. 


CORPORATION  ACCOUNTING 


67 


March  3,  1901. 

C.  A.  Hawley,  Daniel  Bennett,  and  J.  B.  Caldwell  pay  their  second  installment  in  cash, 
receiving  certificates  Nos.  20,  21,  and  22.  John  J.  Gill  pays  one-half  of  his  second  installment, 
receiving  certificate  No.  23,  and  James  Drummond  pays  $500  to  apply  on  his  second  install- 
ment, receiving  certificate  No.  24. 

Enter  carefully  in  installment  list,  as  it  is  from  this  list  that  partial  payments  are  to  be  collected. 
Journalize  and  post  to  stock  ledger. 

March  15,  1901. 

Mrs.  D.  M.  Johnston  and  C.  C.  Sweeney  pay  their  second  installment  with  6  per  cent  from 
March  1,  receiving  certificates  Nos.  25  and  26. 

April  4,  1901. 

Duncan  McGregor  pays  his  full  installment  and  John  J.  Gill  and  James  Drummond  pay 
the  balance  of  their  installments  with  interest  at  6  per  cent  from  March  1,  receiving  certificates 
Nos.  27,  28,  and  29. 

August  1,  1901. 

James  Fitzpatrick  has  transferred  his  installment  certificates  to  Duncan  McGregor,  who 
assumes  payment  of  future  calls. 

All  transfers  of  installments  or  stock  certificates  should  be  made  "on  the  books  of  the  com- 
pany;" i.  e.:  a  provision  in  the  certificate  should  require  the  stockholder  who  transfers  stock  to  sur- 
render his  certificates  with  assignment  directing  the  secretary  to  reissue  certificates  to  transferee. 
Assuming  that  James  Fitzpatrick's  certificates  Nos.  6  and  17  have  been  surrendered  and  can- 
celled, they  should  be  attached  to  the  original  stubs,  and  a  new  certificate,  No.  30,  should  be 
issued  to  Duncan  McGregor.  The  journal  entry  for  this  transaction  does  not  pass  to  the 
general  books.  The  debit,  when  posted,  will  close  James  Fitzpatrick's  account  on  the  stock 
ledger,  and  the  credit,  when  posted,  will  show  Duncan  McGregor  in  possession  of  500 
shares,  with  a  credit  balance  of  $17,500. 

Stock  Journal  E,ntry. 


J2t 


c^ar 


l^^J    /  A  0 \^tdL*^u>.  /  dL£j£  * 


c^2^-j^^z^y2^^^^^^/^^ 


d  J^a . 


?Z^   4  V 


V 


'9z*.  ^a. 


August  15,  1901. 

C.  S.  Bennington  transfers  ten  shares  of  his  partly  paid  stock  to  Duncan  McGregor. 

C.  S.  Bennington  must  surrender  his  certificate  calling  for  fifty  shares  and  have  two  new 
certificates  showing  35  per  cent  paid;  certificate  No.  31  for  ten  shares  to  Duncan  McGregor, 
and  No.  32  for  forty  shares  to  himself.  In  making  the  journal  entry,  post  ten  shares  to  debit  of 
Bennington  and  credit  of  McGregor.     Refer  to  the  certificate  numbers  of  the  entire  transaction. 

September  15,   1901. 

Duncan  McGregor  purchases  the  entire  eighty  shares  of  James  Drummond,  the  transfer 
being  made  in  regular  form  on  the  books.     McGregor  receives  certificate  No.  33. 

March  1,  1902. 

The  remaining  65  per  cent  of  subscription  is  called  in. 

Make  out  installment  list  No.  3  from  the  stock  ledger. 

A.  H.  Norton  hands  a  check  in  payment  of  his  final  installment,  $65,000. 

Upon  a  surrender  of  the  installment  certificates  previously  issued,  which  are  cancelled  and 
attached  to  the  original  stubs,  a  certificate  of  stock  No.  1  is  made  out,  as  shown  on  following 
page. 


68 


HIGHER  ACCOUNTING 


Certificate  No .  / 

For 


Share*. 


ISSUEO  TO 


FROM  WMO*»   TRANSFERRED 


Dated . 


Si  H 


Received  Certificate  NoA. 

for^4^&f^i^»f^hares 


£2^9^<7Z^-^cC*-7tJ 


Certificate  of  Stock. 

THE  UNION  WATCH  COMPANY 

STATE  OF  IOWA 

CAPITAL  STOCK  $400,000 

this  Certifies  That ^^^^^*-^(^€><^>^L 

is  the  owner  "t  &&^^2&L-t>--e>c^--ez^^-e^ Shares  of  the  Capital  Stock 

of  THE  UNION  WATCH  COMPANY 

hilly  paid  transferable  only  on  the  Books  of  the  Corporation,  by  him  or  his  attorney,  upon  sur- 
render of  this  Certificate 

In  Witness  Whereof  the  officers  of  this  Corporation  have  hereunto  subscribed  their 

names  and  caused  the  corporate  Seal  to  be  hereto  affixed  at  cedarkapids,iowx 
thii^=4=^^rteY  of ^^eSL^C^t^^^L  \go-2. 


Enter  iiTstock  journal  the  payment  of  the  last  installment  referring  to  the   installment 

certificate  numbers  and  the  number  of  the  stock  certificate.     This  installment  when  posted  to 

the  ledger  will  show  A.  H.  Norton's  account  credited  with  iooo  shares  on  which  $  100,000,  or 

par  value,  has  been  paid. 

March  2,  1902. 

C.  A.  Hawley,  Mrs.  D.  M.  Johnston,  C.  C.  Sweeney,  Duncan  McGregor,  and  Daniel  Ben- 
nett each  pay  their  last  installment  in  cash  and  receive  certificates  of  stock  Nos.  2,  3,  4,  5,  and 

6  in  the  order  given. 

June  2,  1902. 

Joseph  Davis,  T.  B.  Summers,  and  J.  B.  Caldwell  pay  their  third  installment  with  interest 
at  6  per  cent  from  March  1,  receiving  certificates  of  stock  Nos.  7,  8,  and  9,  in  the  order  given. 

June  23,  1902. 

John  J.  Gill  and  C.  S.  Bennington  are  unable  to  make  any  further  payments  on  stock  ac- 
count. John  J.  Gill  returns  his  installment  certificates  as  forfeited  and  the  company  pays  him 
cash  for  the  amount  to  his  credit  on  stock  account.  (Charge  Unsubscribed  Stock,  credit  Cash.) 
C.  S.  Bennington  takes  paid  up  shares  at  par  for  the  amount  to  his  credit  on  installments,  re- 
ceiving stock  certificate  No.  10,  and  the  balance  of  his  stock  is  returned  to  the  Unsubscribed 
Stock  account. 

In  order  to  show  the  relation  of  the  general  books  to  the  stock  books,  the  student  may 
use  the  last  page  of  his  blank  for  a  general  ledger,  opening  accounts  with  Capital  Stock  (9  lines), 
Subscription  (17  lines),  and  Unsubscribed  Stock  (6  lines).  Post  from  the  general  columns  to 
these  accounts. 

Having  posted,  the  Subscription  account  should  be  in  balance,  showing  that  all  subscrip- 
tions have  been  paid.  The  Unsubscribed  Stock  account  shows  a  number  of  shares  unsold.  De- 
ducting the  number  of  shares  unsold  from  the  credit  to  Capital  Stock,  the  difference  should 
equal  the  list  of  credits  to  stockholders  found  in  stock  ledger.  Take  a  list  of  credit  balances  in 
the  stock  ledger  and  compare  the  total  with  this  amount. 

August  1,  1902. 

The  corporation  purchases  of  W.  C.  Estes  real  estate  at  a  valuation  of  $76,400.  Mr.  Estes 
takes  in  payment  all  unsubscribed  stock  at  no  and  cash  for  the  remainder. 

Stock  certificate  No.  1 1  is  issued.  Debit  Real  Estate;  credit  Unsubscribed  Stock,  Loss 
and  Gain,  and  Cash. 

Open  an  account  with  W.  C.  Estes  in  the  stock  ledger. 

March  1,  1903. 

The  general  books  show  an  undivided  profit  of  over  $40,000.  It  is  decided  to  pay  a 
dividend  of  10  percent  on  all  stock.  Make  a  dividend  list  from  the  stockholders'  accounts,  as 
shown  in  the  stock  ledger.     This  can  be  ruled  on  a  sheet  of  paper  as  per  form  on  page  69. 


CORPORATION  ACCOUNTING 


69 


Dividend  No.   1  of 

10  Per  Cent  Declared  March  1,  1903. 

Name;  of  Stockholders 

No.  OF 
Shares 

Amount  of 
Dividend 

Date  of 
Payment 

Signature 

A.  H.  Norton,  .... 
C.  A.  Hawley,  .... 

IOOO 

500 

IOOOO 

5000 

Mar. 

2 

^^^^^^^-^ 

If  a  dividend  book  is  not  kept,  the  dividend  list  is  usually  pasted  in  the  minute  book.  The 
memorandum  entry  only  is  required  in  the  stock  journal,  as  the  payments  do  not  affect  the 
stockholders'  accounts.     Entries  for  the  cash  dividends  are  made  in  the  general  books. 

March  1,  1905. 

The  profits  of  the  concern,  which  have  been  undivided  since  last  dividend,  now  amount  to 
over  #400,000.  The  board  of  directors  have  previously  obtained  authority  to  increase  the 
capital  stock  to  #1,000,000.  They  vote  to  issue  stock  dividends  to  each  of  the  stockholders  for 
an  amount  equal  to  his  present  stock  holdings;  #200,000  of  the  new  stock  is  to  be  held  for  sale. 
This  issue  of  #200,000  is  to  be  preferred  stock  on  which  is  guaranteed  an  annual  cumulative 
dividend  of  8  per  cent.  Any  profits  in  addition  to  the  8  per  cent  on  preferred  stock  are  to  be 
distributed  in  stock  dividends  to  the  present  stockholders,  whose  shares  will  be  termed  "common 
stock"  in  distinction  from  the  preferred  stock  just  provided  for.  Certificates  of  common  stock 
are  issued  to  the  stockholders  for  stock  dividends,  as  follows:  A.  H.  Norton  No.  12,  C.  A. 
Hawley  No.  13,  Joseph  Davis  No.  14,  Mrs.  D.  M.  Johnston  No.  15,  C.  C.  Sweeny  No.  16, 
Duncan  McGregor  No.  17,  Daniel  Bennett  No.  18,  T.  B.  Summers  No.  19,  J.  B.  Caldwell  No. 
20,  C.  S.  Bennington  No.  21,  and  W.  C.  Estes  No.  22. 

Debit  Loss  and  Gain  and  Unsubscribed  Stock  Preferred.  The  general  ledger  title,  Capital  Stock, 
should  be  changed  to  "Capital  Stock,  Common,"  and  a  new  account  opened  with  "Capital  Stock, 
Preferred"  on  the  fifth  line  below.     Post  to  stock  ledger. 

Many  business  corporations,  in  order  to  attract  capital  to  conduct  their  business,  issue  pre- 
ferred stock.  This  stock  is  subject  to  special  contract  which  gives  the  holder  a  preference 
over  other  stockholders.  Usually  provision  is  made  that  the  preferred  stockholder  shall 
receive  a  certain  per  cent  dividend  annually  whether  the  holder  of  common  stock  receives  any 
dividend  or  not.  Frequently  provision  is  made  for  a  Cumulative  Dividend,  or  a  dividend  pay- 
ment to  include  all  payments  that  have  been  passed  on  account  of  no  profits  earned  at  previous 
dividend  days.  When  the  specified  dividends  are  paid  to  the  holders  of  preferred  stock,  the 
remaining  profits  are  paid  to  the  holders  of  common  stock.  The  dividends  on  the  common 
stock  may  be  greater  or  less  than  on  the  preferred  stock. 

February  1,  1906. 

The  following  stockholders  transfer  their  certificates  to  Duncan  McGregor:  T.  B.  Sum- 
mers, certificates  Nos.  8  and  19;  Daniel  Bennett,  certificates  Nos.  6  and  18;  and  J.  B.  Caldwell, 
certificates  Nos.  9  and  20.  McGregor  receives  certificate  of  common  stock  No.  23  in  place  ot 
the  six  certificates  that  are  surrendered. 

W.  C.  Estes  surrenders  certificates  Nos.  11  and  22,  transferring  one  thousand  shares  of 
his  common  stock  to  A.  H.  Norton  who  receives  certificate  No.  24,  and  taking  new  certificate 
No.  25  for  the  balance. 

March  1,  1906. 

The  preferred  unsubscribed  stock  is  sold  today  at  103  to  the  following  persons  for  cash: — 
A.  H.  Norton  1000  shares — Preferred  certificate  No.  I. 
David  Fackler  100  shares — Preferred  certificate  No.  2. 
M.  Harrington  50  shares — Preferred  certificate  No.  3. 

The  premium  in  above  sales  is  credited  to  Loss  and  Gain.  A  separate  stock  ledger  should  be 
provided  for  preferred  stock.  In  this  practice  set,  pages  22  and  23  of  the  stock  ledger  should  be  used 
for  preferred  stockholders. 


70  HIGHER  ACCOUNTING 


Certificate  of  Preferred  Stock. 


Stateof.owa.  UNION   WATCH   COMPANY  Certificate  No.X 

CAPITAL  STOCK  $1 ,000,000.  Preferred  Issue  of  March  1 ,  1 905,  $200,000. 

THIS  CERTIFIES  that A-  H-  Norton 

is  the  owner  of 0ne  Thousand Shares  of  preferred  stock  of  the  Union 

Watch  Company  of  the  par  value  of  One  Hundred  Dollars  per  share,  fully  paid  and  non- 
assessable, transferable  only  on  the  books  of  the  company,  in  person  or  by  attorney  in  fact 
on  surrender  of  this  certificate  properly  endorsed. 

An  accumulated  dividend  of  eight  per  cent  from  date  of  this  certificate  payable  annually  on 
the  first  of  March  on  preferred  stock  of  this  corporation,  shall  be  paid  from  its  net  earnings 
before  any  dividend  shall  be  declared  or  paid  on  the  common  stock,  and  in  case  of  non-payment 
of  any  such  dividend  the  portion  unpaid  shall  be  a  charge  against  the  earnings  of  said  company 
which  shall  be  paid  prior  to  any  dividends  upon  the  common  stock. 

Any  profits  in  excess  of  said  annual  eight  per  cent  shall  accrue  to  the  common  stock  ac- 
cording to  the  holdings  thereof. 

IN  WITNESS  WHEREOF  the  officers  of  this  corporation  have  hereunto  sub- 
scribed their  names  and  caused  the  corporate  Seal  to  be  hereto  affixed  at  Cedar  Rapids, 

Iowa,  this ^ day  of March  1 9_^ 

A-  Student Secretary.  A-  H-  Norton President. 


January  1,  1907. 

The  remaining  shares  of  unsubscribed  stock  preferred  are  purchased  by  Duncan  McGregor 
at  103  for  cash,  who  receives  preferred  certificate  No.  4. 

March  1,  1907. 

The  undivided  profits  in  treasury,  amounting  to  $170,333.33,  are  to  be  distributed  as 
dividends  to  stockholders.  The  preferred  stock  receives  a  dividend  as  per  terms  in  the  pre- 
ferred stock    certificates,  the  remaining  profits  are   distributed  to  the  holders  of  common  stock. 

Take  lists  of  stockholders'  accounts  and  compare  the  totals  with  the  capital  stock,  com- 
mon and  preferred.  If  correct,  make  out  two  dividend  lists  showing  in  the  preferred  list  the 
time  since  the  issue  of  each  certificate. 

Questions  on  Corporation  Accounting. 

1.  What  is  meant  by  shares  of  stock? 

2.  Define  joint  stock  accounting. 

3.  Name  the  general  procedure  in  organizing  a  corporation. 

4.  From  what  authority  is  th2  charter,  certificate,  or  license  of  a  corporation  received? 

5.  How  does  a  stockholder  become  such? 

6.  Name  the  three  principal  books  of  record  and  account  in  a  corporation.     , 

7.  Describe  the  minute  book;  the  stock  journal;  the  stock  ledger. 

8.  What  is  an  installment  certificate  or  installment  scrip? 

9.  What  is  a  stock  certificate? 

10.  Mention  the  general  differences  between  preferred  and  common  stock. 

11.  How  is  stock  transferred  from  one  holder  to  another? 

12.  What  are  the  articles  of  incorporation? 

13.  What  is  a  subscription  list?  installment  list?  dividend  list?  assessment  list? 

14.  How  can  subscribers  be  compelled  to  pay  their  installments? 

15.  Where  are  articles  of  incorporation  recorded? 

16.  How  are  general  ledger  accounts  posted  from  the  stock  journal? 

17.  How  are  stock  ledger  entries  posted  from  the  stock  journal? 

18.  How  is  the  posting  to  the  stock  ledger  verified? 

19.  Does  a  dividend  payment  involve  a  stock  ledger,  or  a  general  ledger  entry? 

20.  Explain  the  following  general  ledger   accounts:     Capital  Stock,  Subscription,  Unsub- 

scribed Stock. 


Factory  Accounting, 


Departments— Voucher  System— Cost  Accounting, 

This  manufacturing  set  of  books  is  so  arranged  as  to  give  to  the  proprietor  or  superinten- 
dent a  daily  statement  of  the  business,  derived  from  vouchers  originating  in  the  Office  and  in 
three  departments;  viz.:  Factory,  Sales,  and  Collections.  The  aggregates  of  the  general  accounts, 
showing  the  progress  of  the  business,  are  posted  daily  to  a  balance  ledger. 

i.  Office.  All  general  accounts  not  originating  in  any  department  and  all  open  pur- 
chase accounts. 

2.  Factory.  One  general  account  is  drawn  from  this  department — Unfinished  Stock. 
A  voucher  register  in  this  department  distributes  the  various  charges  for  material,  labor,  fuel, 
transportation,  etc.  All  of  these  items,  as  well  as  the  credit  for  the  finished  product,  are  car- 
ried to  the  general  books  under  this  title. 

3.  Sales  Department.  Three  general  ledger  accounts  are  drawn  from  this  depart- 
ment:— 

Merchandise,  debited  with  the  cost  of  product  from  the  factory,  and  credited  with  sales  at 
cost  prices.  The  balance  of  the  merchandise  account  shows  the  factory  cost  of  the  merchandise 
at  any  given  date. 

Cost  of  Sales,  including  advertising,  traveling  expenses,  postage  and  stationery,  salaries 
and  other  items  appearing  on  the  voucher  register  of  this  department  as  necessary  expenses  of 
selling. 

Profit  of  Sales,  representing  the  excess  of  selling  price  over  factory  cost  of  all  items  sold. 

4.  Collection  Department.  Five  accounts  originate  from  this  department:  Ac- 
counts Receivable,  Bills  Receivable,  Cost  of  Collection,  Losses  of  Collection,  Interest  of  Collection. 

The  rulings  of  the  books  are  such  as  to  make  a  perpetual  showing  of  the  information  de- 
sired. 

The  General  Ledger. 

It  is  planned  to  have  the  general  ledger  contain  the  following  accounts  which  are  to  be 
posted  and  balances  extended  for  comparison  daily. 

Capital  Stock  } 

Subscription  >  Pertaining  to  the  ownership  of  interest  in  the  business. 

Unsubscribed  Stock       I 

Real  Estate  ^ 

Machinery     >Kept  as  separate  ledger  accounts  to  be  adjusted  to  actual  value  monthly. 

Tools  J 

Unfinished  Stock,  representing  actual  cost  of  material,  fuel,  labor,  and  all  other  elements 
of  manufacture  not  yet  converted  into  finished  product. 

Merchandise,  representing  factory  cost  of  all  products  of  the  factory  unsold. 

Accounts  Receivable,  representing  all  open  sales  accounts  with  agents  or  others. 

Bills  Receivable,  representing  the  notes  received  in  settlement  of  agents'  accounts  or 
from  the  direct  sale  of  merchandise. 

Vouchers  Payable,  representing  all  accounts  regularly  entered,  for  which  checks  are  to 
be  issued  according  to  terms. 

71- 


72  HIGHER  ACCOUNTING 


Cash,  showing  daily  cash  balances.  • 

Cost  of  Sales,  representing  all  outlays  from  sales  department  such  as  advertising,  salaries 
of  salesmen,  traveling  expenses  incurred  in  the  sale  of  merchandise. 

Profit  of  Sales,  representing  the  excess  of  net  selling  price  over  factory  cost  of  goods  sold 
(computed  daily). 

Cost  of  Collection,  representing  outlays,  such  as  postage,  traveling  expenses,  attorney 
fees,  bank  collection  charges,  etc.,  incurred  in  collecting  accounts  receivable  and  notes 
of  the  company. 

Loss  of  Collection,  representing  claims  uncollectible  in  full  or  in  part  and  charged  oft 
as  worthless. 

Interest    of  Collections,  representing  interest  on  accounts  and  bills  receivable. 

Depreciation,  charged  with  estimated  wear  and  tear  and  other  loss  in  value  of  machinery, 
tools,  and  buildings. 

Office  Supervision,  salaries  of  general  office  force. 

General  Expenses,  expenses  not  pertaining  exclusively  to  any  department. 

Personal  Accounts.     Four  accounts  current  with  firms    from  whom  material  is  pur- 
chased are  to  be  kept  in  the  ledger.     They  are,  Fiske  &  Jones,  Western  Paint  Co.,  Union 
Iron  Co.,  and  Kent  Lumber  Co.     Accounts  are  also  kept  with  the  traveling  representa- 
tives. 
The  department  voucher  registers  are  so  arranged  as  to  make  an  entry  of  every  transac- 
tion occuring  in  the  given  department.      This  record  is  transferred  to  a  voucher  from  which 

charges  or  credits  affecting  the  above  named   general   accounts  will  be  made  in  the  general 

office. 

The  General  Journal. 

The  General  Journal  contains  a  daily  record  of  all  transactions  drawn  from  the  department 
vouchers.  It  also  contains  such  entries  as  record  transactions  originating  in  the  office.  Special 
columns  are  used  for  such  general  accounts  as  will  have  repeated  entries  in  a  day's  work.  It 
is  balanced  each  day  and  posted  to  the  ledger. 

The  daily  exhibit  of  the  condition  of  the  business  is  to  be  especially  noted  in  this  set. 

The  Voucher. 

A  voucher  is  a  written  form  made  for  the  purpose  of  verifying  any  transaction  or  fact  of 
the  business.  In  a  large  business  where  different  departments  are  carrying  on  their  different 
business  activities,  a  voucher  for  every  essential  transaction  in  a  given  department,  signed  by 
the  person  responsible  in  that  department,  should  be  sent  to  the  central  office.  These  vouchers 
may  concern  journal  records  called  Record  Vouchers,  or  they  may  call  for  cash  payments 
called  Vouchers  Payable.  All  vouchers  are  recorded  in  the  voucher  register  of  the  department 
where  they  originate.     They  are  then  passed  to  the  central  office. 

It  is  essential  that  every  cash  payment  made  should  be  properly  receipted.  The*  voucher 
itemizes  the  matter  referred  to,  giving  the  proper  disposition.  If  payment  is  required,  the  office 
will  issue  a  check,  which,  accompanied  by  the  voucher,  is  handed  or  mailed  to  the  firm  to  be 
paid  the  amount  of  the  bill.  The  office  requests  the  payee  to  receipt  the  voucher,  if  correct,  and 
return  it  to  the  office.  As  there  are  occasions  when  the  payee  fails  to  return  the  receipted 
voucher,  this  contingency  may  be  guarded  against  by  having  the  check  printed  on  the  voucher 
sheet,  thus  requiring  its  proper  receipt  when  the  check  is  taken  to  the  bank.  This  form  is  called 
a  Voucher  Check.  The  check  that  pays  a  given  voucher  is  not  issued  in  the  department  from 
which  the  entry  originates,  but  is  left  to  be  issued  or  not  as  decided  upon  in  the  office. 

The  record  vouchers  after  the  entries  are  made,  the  vouchers  payable  after  receipt  and  re- 
turn by  the  payee,  and  the  voucher  checks  after  the  bank  returns  them  with  the  monthly  state- 
ment, are  filed  numerically  in  boxes,  each  department  separately.  Thus  the  voucher  for  any 
past  transaction  can  be  produced  promptly  by  number  whenever  any  entry  is  questioned. 

The  detailed  records  for  the  handling  of  vouchers  is  one  of  the  features  of  this  set  and 
should  be  observed  closely  by  the  student  as  the  work  progresses. 


FACTORY  ACCOUNTING 


73 


Monday,  Apr.  1, 190— • 

A  stock  company  has 
been  incorporated  under 
the  name  of  The  Brown- 
Sherman  Wagon  Com- 
pany with  a  capital  stock 
of  $100,000  divided  into 
shares  of  $100  each. 
Subscriptions  have  been 
received  for  $80,000  of 
the  stock,  while  $20,000 
is  to  be  charged  to  Un- 
subscribed Stock. 

In  the  absence  of  a  stock 
journal,  an  entry  is  re- 
quired in  the  general  jour- 
nal debiting  Subscription 
and  Unsubscribed  Stock 
accounts  and  crediting 
Capital  Stock. 

The  following  persons 
have  signed  the  sub- 
scription list  for  the 
number  of  shares  set  op- 
posite their  names: 
Henry  Brown,  350 
Shares;  Roger  Sherman, 
200  Shares;  Martin 
Townsend,  100  Shares; 
Cyrus  Adams,  50  Shares; 
John  Carter,  50  Shares; 
Peter  Foster,  50  Shares. 

A  subscription  list  would 
be  made  like  the  one  il- 
lustrated on  page  60.  En- 
tries would  be  made  later 
in  the  stock  ledger.  In 
writing  this  set  the  stu- 
dent may  omit  the  entries 
of  stockholders'  accounts, 
making  only  the  entries 
that  pertain  to  the  general 
books. 

The  first  day's  work 
being  very  brief,  do  not 
post  until  the  close  of 
the  second  day. 


74  HIGHER  ACCOUNTING 

Tuesday,  April  2,  190  — 

Bought  of  Brown  &  Sherman,  receiving  bill  of  sale,  their  entire  manufacturing  plant  and 
material,  finished  stock,  and  other  resources  and  liabilities  as  per  the  following  statement: — 

RESOURCES. 

The  real  property,  including  grounds  and  buildings #22,000 

Machinery 1 1 ,500 

Tools 1,500 

Lumber,  Iron,  and  other  material  for  manufacture  of  vehicles, 

per  inventory 1 2,000 

Finished  Vehicles  ready  for  sale,  at  factory  cost,  per  schedule  10,000 

Bills  Receivable,  per  schedule 5,000 

Accounts  Receivable,  per  schedule 4,599.84 

#66,599.84 

LIABILITIES. 

Four  balances  of  account  which  are  to  be  kept  in  the  general  ledger: — 

Kent  Lumber  Co.,  Bentonville #2,810.70 

Union  Iron  Co.,  Iron  City 2,749.34 

Western  Paint  Co.,  Chicago 775-55 

Fisk  &  Jones,  Boston 264.25 

#6,599.84 
Form  of  a  Record  Voucher. 

£^--<&^t~r  "yTsfryr/ Factory  Voucher  N«  / 

Brown-Sherman  Wagon  Co  o«ce  voucher  n0 


JOURNAL  ENTRY 


TlVVtL 


DEBTOR  TO 


7^ 


<?0<2 


EXPLANATION 


EXTENSIONS 


r'S  (^*-^ZZiS 


&a^^-z&   t2U^s  ^ZZ*s 


n#j"<? 


^^-^^ 


^: 


/7  ^ 


//, 


/-y#  a  0 


Correct: 


Superintendent. 


Approved  by: 


REMARKS: 


FACTORY  ACCOUNTING 


75 


The  new  company  has  allowed  Brown  &  Sher- 
man the  net  worth  of  plant  as  shown  on  page  74,  giv- 
ing Henry  Brown  350  shares  of  stock  fully  paid  up, 
Roger  Sherman  200  shares  of  stock  fully  paid  up  and 
credit  on  account  for  $5,000,  the  remainder  of  his 
former  interest. 

Journalize,  giving  subscription  account  credit  for 
the  350  and  200  shares  amounting  to  #55,000  given 
to  Henry  Brown  and  Roger  Sherman,  respectively, 
for  their  interest  in  their  former  business.  Roger 
Sherman  is  to  receive  $5,000  on  open  account  to 
balance  the  value  set  upon  the  property  of  Brown  and 
Sherman. 

Cyrus  Adams  and  Peter  Foster  have  each  paid 
cash  for  their  stock  subscription,  #5,000.  (Enter  in 
journal.)  Deposit  #10,000  in  bank.  (Enter  in  check 
register.) 

Foot  the  debit  and  credit  columns,  and  if  in  bal- 
ance post  to  the  ledger,  extending  the  balance  of 
each  account  in  the  balance  columns. 

The  general  accounts  are  to  be  posted  to  the  ledger 
daily  and  balances  extended  wherever  posting  is  done, 
so  that  the  tendency  of  the  business  may  be  determined 
at  any  time  by  referring  to  the  ledger  accounts.  Enter 
these  accounts  in  the  order  in  which  they  appear  under 
the  heading  "The  General  Ledger,"  except;that  personal 
accounts  will  be  placed  last. 

Factory. 

The  Superintendent  of  this  department 
has  to  do  with  the  numerous  computations  involved 
in  the  cost  of  material  and  labor  expended  on  a  given 
item.  For  example,  if  50  wagons  of  a  given  kind  are 
to  be  made,  the  superintendent  is  to  select  the  lum- 
ber, iron,  ready  made  parts,  paints,  etc.,  required. 
He  computes  the  number  of  hours'  labor  employed 
in  making  the  wagons,  the  amount  of  fuel  consumed, 
the  cost  of  rent,  light,  office  supervision,  clerical  ser- 
vice, and  all  other  items  entering  into  the  cost  of  pro- 
ducing the  given  number  of  wagons.  These  items 
are  entered  on  the  department  voucher  register,  but 
as  the  details  do  not  concern  the  general  books,  the 
entire  cost  of  manufacture  is  there  debited  to  one 
title  in  the  general  books,  i.  e.,  Unfinished  Stock. 
This  title  is  credited  with  the  cost  price  of  the  finished 
product  which  is  passed  to  the  sales  department. 
Thus  the  balance  of  Unfinished  Stock  in  the  general 
books  will  show  the  actual  cost  of  all  material  on 
hand. 

The    items    entering    into    cost    of    the    factory 

{>roduct  are  so  specialized  that  the  student  would  gain 
ittle  by  making  the  estimates.    The  form  in  which  they 
are  prepared  is  given  on  page  4  of  factory  blank. 


76 


HIGHER  ACCOUNTING 


VOUCHER  REGISTER 


DATE 


^4^ 


Voucher 
No. 


To  Whom  Payable 


Explanation 


UNFINISHED 


Iron  Mfgd.  Parts 


Paints,  Oils.  Etc. 


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Hooks  Used.  The  student  will  use  a  Voucher  Register  and  a  Time  Book  in  this  de- 
partment. The  voucher  register  contains  a  record  of  every  voucher  passed  to  the  office.  The 
time  book  contains  a  daily  entry  of  the  time  spent  in  labor  each  day  by  the  factory  employees. 

You  are  now  to  suppose  that  you  have  taken  an  inventory  of  all  unfinished  stock  on  hand 
and  found  it  to  be  as  follows: — 

Wood,  $5,950.00 

Iron,  2,789.30 

Mfg'd  Parts,  2,292.50 
Paints,  Oils,  etc.,  795-30 
Coal,  172.40 

#12,000.00 

The  total  equals  the  charge  made  to  Unfinished  Stock  in  the  opening  entry. 
A  record  voucher  No.  1  for  this  entry  would  be  made,  signed  by  superintendent,  and  en- 
tered in  the  Voucher  Register,  charging  in  the  columns  affected  and  crediting  the  office. 

The  Voucher  Form.  To  get  a  clear  idea  of  the  use  of  a  voucher,  consider  the  present 
business,  which  is  carried  on  in  three  departments — manufacture,  sales,  collection.  Each  de- 
partment is  under  the  management  of  an  expert  who  buys,  sells,  and  carries  on  the  transactions 
necessary  for  his  part  of  the  work.  All  bills  are  paid  from  the  general  office  where  also  all 
general  entries  are  made. 

The  voucher  is  the  means  of  notifying  the  general  office  of  every  transaction.  This  notice 
is  signed  by  the  responsible  person  in  the  department  from  which  it  originates.  The  voucher 
may  notify  the  office  of  goods  bought  to  be  paid  for  (voucher  payable),  of  goods  sold  from 
which  collections  are  to  be  made  (voucher  receivable),  or  of  the  transfer  of  values  from  one  de- 
partment to  another  (record  voucher).  One  form  of  voucher  may  be  suited  to  all  these  uses. 
A  record  voucher  is  illustrated  on  page  74,  and  a  voucher  payable  on  page  82. 

The  workmen  formerly  employed  by  Brown  &  Sherman  have  been  retained  at  following 
wages: — 

Charles  Martin,  foreman  in  wood  work,  at  #5.50  per  day;  and  other  workmen,  numbered 
2  to  10  inclusive  (names  to  be  supplied  by  the  student),  in  same  department  at  #4.00  per  day. 
Henry  Spencer,  foreman  in  blacksmith  shop  at  #5.00  per  day;  and  other  workmen,  numbered 
12  to  20  inclusive,  in  same  department,  at  #3.50  per  day.  John  Thomas,  foreman  in  trimming 
department,  at  $6  per  day;  and  other  workmen  numbered  22  to  30  inclusive,  in  same  depart- 


FACTORY  ACCOUNTING 


77 


FACTORY. 


STOCK       DR. 


Sales  Dept.  Dr. 


Unf.  Stock  Cr 


Office  Cr. 


My 


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ment,  at  $4  50  per  day.     Frank  Reynolds,  foreman  in  paint  shop,  at  #5.50  per  day;  and  other 
workmen,  numbered  32  to  40  inclusive,  in  same  department,  at  $4  per  day. 

Eight  hours  is  considered  a  day's  work  in  each  department.  1 1 

In  reporting  work,  if  any  of  the  men  lose  time,  the  number  of  hours  they  work  will  be  re- 
ported. 

Model  Form  of  Time  Book— Different  Amounts. 


ISlsO^TSUL^/ 


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3d 


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78  HIGHER  ACCOUNTING 


Workmen's  Report  for  Monday.  No.  2  six  hours,  No.  12  six  hours,  No.  15 
five  hours,  No.  24  six  hours,  No.  32  six  hours,  and  all  others  full  time. 

Workmen's  Report  for  Tuesday.  No.  3  six  hours,  No.  15  four  hours,  No. 
22  five  hours,  No.  33  six  hours,  and  all  others  full  time. 

Enter  in  time  book  as  shown  in  model  on  page  77,  using  different  amounts. 

The  Sales  Department. 

The  superintendent  of  this  department  charges  Merchandise  with  factory  cost  price  of  all 
product  received,  and  credits  the  factory.  His  sales  are  credited  daily  to  two  accounts:  Mer- 
chandise for  the  factory  cost  of  product  sold,  and  Profit  on  Sales  for  the  excess  of  selling  price 
over  factory  cost. 

His  voucher  register  shows  debits  from  the  various  expenses  of  sales,  as  advertising,  travel- 
ing expense,  postage  and  stationery,  etc.  All  of  these  items  appear  under  one  heading,  Cost 
of  Sales,  in  the  general  books.  He  also  charges  the  collection  department  with  all  accounts 
against  customers  made  during  the  day,  which  are  posted  to  the  sales  ledger  kept  in  the  col- 
lection department. 

BooRs  Used.  A  Voucher  Register,  to  contain  all  record  vouchers  and  vouchers 
payable. 

A  Sales  Book  in  which  all  sales  are  recorded. 

A  Daily  Inventory  Book  showing  the  number  of  each  kind  of  vehicle  on  hand  each  morning,  the 
number  sold  and  the  remainder  carried  over  to  the  next  morning  would  be  kept,  but  is  not  required  of 
the  student. 

The  following  prices  have  been  made  the  basis  of  cost  and  sale  in  this  department: — 

Factory 
Cost 

Phaetons #78.29 

Surreys 72.5 1 

Top  Buggies 69.10 

**  Spring  Wagons. ...  48  60 
Lumber  Wagons. . ,  49. 24 
Road  Carts 1 4.90 

Assuming  that  you  have  taken  inventory  of  all  vehicles  at  factory  cost  and  found  the  same 
to  amount  $  10,000,  enter  voucher  in  your  register  charging  Merchandise  and  crediting  Office. 
Consider  this  voucher  made  out  and  passed  to  the  office. 

The  Collection  Department. 
The  superintendent  of  this  department  has  to  do  with  the  collection  of  all  open  accounts 
and  notes.  The  sales  book,  or  duplicate  sales  sheets,  are  passed  to  this  department  daily  from 
the  sales  department.  In  this  department  open  accounts  are  settled  by  cash  or  notes,  the  notes 
are  secured  or  collected  and  all  correspondence  necessary  for  collecting  accounts  in  different 
cities  is  carried  on.  The  expenses  undergone  are  indicated  by  the  headings  of  the  collection 
department  voucher  register. 

Books  Used.     A  Voucher  Register  similar  to  the  registers  in  other  departments. 
A  Collection  Journal,  with  columns  for  distribution  of  collections. 
A  Sales  Ledger.     Special  ruling. 

A  Bills  Receivable  Book,  ruled  to  suit  accounts  with  agents. 

The  following  is  a  list  of  the  open  accounts  with  former  local  agents  assigned  to  the  firm  by 
Brown  &  Sherman: — 

List  20%  Net 

Henry  A.  Cushman,  Corning #750.25  #150.05  #60020 

Cyrus  E.  French,    Fulton 692.25  138.45  553-8o 

Geo.  A.  Truman,   Trenton 1250.50  250.10  1000.40 

Benjamin  Brown,  Brunswick 1526.75  305.35  1221.40 

Emerson  &  Gardner,  Georgetown 619.20  123.84  495-36 

David  Horton,  Hudson 910.85  182.17  728.68 

Enter  these  in  Sales  Ledger. 


List 

Net 

Profit 

Profit 

Selling 

20%  off 

20%  off 

25%  off 

#130. 

#104. 

$25.71 

#19.21 

125. 

IOO. 

27.49 

21.24 

no. 

88. 

18.90 

I3  40 

95- 

76. 

27.40 

22.65 

90. 

72. 

22.76 

18.26 

25. 

20. 

5.IO 

3-85 

FACTORY  ACCOUNTING 


79 


An  Account  from  the  Sales  Ledger. 


/ 


Date 

Explanation 

Fol. 

List 

Commission 

Net  Charge 

Credits 

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The  following  notes  are  entered  at  face.  The  accrued  interest  is  considered  equal  to  prob- 
able losses  of  doubtful  notes.  All  notes  are  dated  the  previous  year.  They  are  sent  in  by  the 
local  agents  of  the  company  in  settlement  of  their  accounts.  Local  agents- send  to  the  firm 
cash,  the  notes  of  their  customers,  or  their  own  notes  in  settlement  of  account. 


B.  Bogg, 
J.  Mitchell, 
M.  McKnight, 
Wm.  Morris, 
Henry  Schwartz, 
James  Bradley, 
S.  Florian, 
Geo.  A.  Truman, 
Edwin  Schuman, 
J.  Nelson, 
James  McDermott, 
Myron  Young, 
Daniel  Flowers, 


Fulton, 

Fulton, 

Ely, 

Mt.  Morris, 


Fulton, 

Trenton, 

Georgetown 


Youngstown, 


favor  Cyrus  French, 


Date 
Sept.    5 
"      15 
4 


Dec. 

Aug. 

The  firm  (agent's  note)  Dec. 

Emerson  &  Gardner,      Oct. 
Ki  it  << 

July 
The  firm  (agent's  note)  Dec. 
Myron  Young,  " 


11 

16 

11 

4 

6 

3 

5 

14 

4 


Time 
12  mo. 
10     " 

8  " 
7  " 
7     " 


4 
12 
12 
7 
4 
4 


$  100  &  6%  from  date 

100  &  6% 

50  &  7% 

150  &  6% 

140  &  7% 

250  &  6% 

140  &  7% 

1500  &  6% 

500  &  7% 

400  &  6% 

30  &  7% 

1500  &  6% 

140  &  6% 


The  above  notes  have  been  endorsed  to  the  firm  by  agents  in  payment  of  their  accounts  or 
have  been  given  to  the  firm  by  agents  direct. 

Enter  in  Bills  Receivable  Book.  The  bill  book  should  show  not  only  the  address  of  the 
note  makers  but  also  the  agent  who  has  indorsed  them  to  the  firm. 

See  model  form  of  Bills  Receivable  Book  on  pages  26  and  27. 

Make  voucher  record  showing  aggregate  accounts  receivable  and  bills  receivable  on  hand, 
crediting  the  office. 


The  Office. 

Three  record  vouchers  have  been  received  from 

Manufacturing  department  debiting  Unfinished  Stock, 


Sales  "  "         Merchandise, 

Collection  "  "        Accounts  Receivable, 

Bills  Receivable, 

Check  these  vouchers  against  the  amounts  charged  in  the  general  journal.  If  they  agree, 
the  entries  may  be  considered  verified.  A  file  should  be  kept  for  each  department,  and  all 
vouchers,  as  soon  as  disposed  of,  should  be  placed  in  these  files. 


#12,000 
10,000 

4,599.84 
5,000 


80 


HIGHER  ACCOUNTING 


BILLS. 


Maker 


Address 


i     Agent  from 
Whom  Received 


Date  of  Paper 


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Wednesday,  April  3,  190—. 

Sales  Department.  Shipped  Myron  Young,  Youngstown,  3  Lumber  Wagons,  2 
Road  Carts,  1  Top  Buggy.     These  are  billed  at  list  less  20  per  cent. 

It  is  assumed  that  an  agency  contract  exists  between  each  agent  and  the  firm  whereby  the  agent 
is  to  receive  20  per  cent  discount  from  all  vehicles  billed  him,  until  the  sales  amount  to  |$2000  net, 
after  that  his  discount  will  be  25  per  cent.  He  is  to  pay  for  same  in  cash  or  in  interest  bearing  notes 
of  his  customers,  guaranteed  by  him. 

Extend  in  sales  book  showing  list,  discount,  and  net  as  in  model. 

Shipped  Henry  A.  Cushman,  Corning,  2  Phaetons,  1  Surrey,  20  per  cent  commission. 

Shipped  Geo.  A.  Truman,  Trenton,  7  Top  Buggies,  20  per  cent  commission. 

After  entry  in  sales  book,  foot  the  day's  sales. 

At  the  close  of  the  day  there  should  be  made  on  a  record  voucher  a  list  of  the  vehicles 
sold  and  the  factory  cost  and  profit  of  each.  In  the  absence  of  the  voucher  forms  these  may 
be  computed  on  a  sheet  of  scratch  paper.  After  the  proper  entry  therefor  is  made  in  the 
voucher  register,  the  voucher  may  be  considered  as  passed  to  the  office. 

Pass  the  sales  book  to  the  collection  department  and  enter  a  record  voucher,  crediting 
Merchandise  and  Profit  on  Sales,  and  debiting  Collection  Department. 

Two  sales  books  may  be  kept  if  desired,  one  for  use  in  the  sales  department  while  the  other  is 
being:  posted  in  the  collection  department  on  alternate  days.  Another  method  suited  to  some  kinds 
of  billing  is  to  make  the  bills  in  triplicate,  sending  one  copy  to  the  customer,  one  to  the  collection 
department,  and  retaining  the  third.    In  this  set  one  sales  book  will  be  used  as  above  described. 

Purchased  of  Caldwell  &  Co.,  terms  cash,  books  and  stationery  for  the  sales  department 
amounting  to  #128.30.     Enter  a  voucher  to  be  passed  to  office. 

Enter  the  debit  in  "Stationery"  column  under  the  general  charge  "Cost  of  Sales."  The 
departments  are  not  responsible  for  the  payment  of  any  bills,  but  leave  all  payments  or  credits 
to  be  disposed  of  in  the  office;  hence,  credit  Office.  The  department  record  would  show  on  the 
register,  "Stationery"  debited  and  "Office"  credited.  The  voucher  for  the  office  would  show 
"Cost  of  Sales"  debited,  the  credit  to  be  supplied. 

Enter  voucher  No.  4,  calling  for  postage  stamps,  amount  #50.  This  voucher  would  be 
entered  debiting  "Postage"  in  "Cost  of  Sales,"  and  crediting  "Office."  If  the  voucher  were 
used,  an  explanation  like  that  given  below  would  be  made  in  explanation  space: — 


800 — 5  cent  stamps  for  catalog  mailing 
400 — 2     "         "        "    letters 
200 — Postal  Cards  for  general  use 


#40.00 
800 
2.00 

#;ooo 


This  voucher  is  to  be  sent  to  office  by  messenger,  who  will  receive  the  stamps  at  the  office 


desk. 


FACTORY  ACCOUNTING 


81 


RF.CFJVABI  R 


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77 


Remarks 


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Enter  voucher  payable,  favor  Star  Newspaper  Agency  for  advertising,  #190,  and  pass 
same  to  office. 

Hereafter,  number  vouchers  in  the  order  of  entry  in  the  voucher  register. 

Enter  voucher  payable  favor  M.,  K.  &  T.  Ry.,  $180,  price  of  three  2,000  mile  mileage 
books  used  by  traveling  salesmen. 

Foot  the  voucher  register  in  pencil  or  red  ink  to  prove  that  the  total  credits  equal  the  total 
debits. 

SALES  ROOK. 


82 


HIGHER  ACCOUNTING 


Factory.  Received  from  Halloway  &  Co.,  a  car  load  of  oak  timber,  invoiced  April  I, 
at  $71 1.60,  30  days  acct.  Enter  voucher  No.  2,  debiting  Unfinished  Stock  (wood  column) 
and  crediting  Office. 

Received  from  C.  &  N.  W.  Ry.  Co.,  freight  bill  for  above,  $62.31.  Enter  voucher  No.  3 
as  before. 

Received  from  Acme  Paint  Co.,  invoice  of  paints  dated  April  1,  amounting  to  $392.61, 
billed  at  60  days,  for  which  enter  voucher. 

Workmen's  Report.  No.  5  seven  hours,  No.  1 1  five  hours,  No.  23  six  hours,  No. 
35  four  hours,  Nos.  7,  17,  and  27  absent  all  day.  Others  have  worked  full  time.  Enter  in 
time  book. 


Form  of  a  Voucher  Payable. 


Brown-Sherman  Wagon  Jpo. 

\  Debtor  to 


Factory  Voucher  No. 
Office  Voucher  No. 


JL 


Terms- 


JOURNAL  ENTRY 


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EXPLANATION 


INVOICE  DATE 


EXTENSIONS 


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Correct: 


Approved  by 


Received  of  the  BROWN -SHERMAN  WAGON  CO. 

t^>£e^L*l(/*//0»      HOLLARS 
in  settlement  of  above  account. 

Date 


Prciidenl. 

PLEASE    DATE.    SI9N    AND   RETURN    THIS  VOUCHER    N  EXT    MAIL 


Collection  Department.  Received  from  sales  department  the  sales  book  showing 
the  day's  net  total  of  #1268.  Enter  record  voucher  debiting  Accounts  Receivable  and  credit- 
ing Sales  Department. 

Post  sales  book  entries  to  the  sales  ledger,  entering  list,  discount,  and  net  amounts  in  the 
respective  columns. 

Enter  voucher  for  postage,  #30. 

Under  the  general  heading,  Cost  of  Collection,  the  three  columns  should  have  sub  heads, 
"Salaries,"  "Traveling  Expenses,"  and  "Collection  Charges,  Postage  and  General." 

Enter  voucher  favor  C.  &  N.  W.  Ry.  Co.  for  #60  for  mileage  book  for  traveling  collector 
and  send  to  office. 

See  that  the  voucher  register  is  in  balance. 


FACTORY  ACCOUNTING 


83 


Office.  The  vouchers  re- 
ceived from  the  three  depart- 
ments will  now  be  taken  up  in 
the  order  of  the  departments  is- 
suing them.  From  the  factory 
3  vouchers: — 

No.  2,  debiting  Unfinished 
Stock;  bought  from  Halloway  & 
Co.,  #711.60,  Apr.  1,  30   days. 

No.  3,  debiting  Unfinished 
Stock;  due  to  C.  &  N.  W.  Ry. 
Co.,  #62.31,  Apr.  1,  Cash. 

No.  4,  debiting  Unfinished 
Stock;  bought  from  Acme  Paint 
Co.,  #392.61,  Apr.  1,  60  days. 

Give  these  vouchers  office 
numbers  4,  5 ,  and  6,  respectively. 

Taking  up  F.  V.  No.  2,  (Fact- 
ory Voucher  No.  2),  to  which 
has  been  given  O.  V.  No.  4,  (Of- 
fice Voucher  No.  4);  note  that  un- 
finished stock  has  been  charged, 
while  the  credit  is  to  be  officially 
determined.  If  this  voucher 
called  for  immediate  payment,  a 
check  could  be  issued  at  once. 
As  it  is  a  bill  allowing  30  days 
time  from  April  1,  it  will  be  en- 
tered in  the  journal,  charging 
"Unfinished  Stock"  in  the  spec- 
ial column  and  crediting  Vouch- 
ers Payable.  After  the  voucher 
payable  is  entered,  the  maturity 
date  should  be  filed  on  the  back. 
Such  future  due  vouchers  are  to 
be  placed  in  a  clip  in  the  order 
of  their  maturing  dates,  to  be 
taken  up  and  paid  at  the  proper 
time.  When  payment  is  made, 
the  voucher  is  sent  with  the 
check  to  be  receipted  by  the 
payee,  who  should  return  it*  It 
is  then  filed  numerically  with 
the  other  vouchers. 

O.  V.'s  Nos.  5  and  6,  payable 
to  C.  &  N.  W.  Ry.  Co.  and  Ac- 
me Paint  Co,  should  be  entered 
as  vouchers  payable,  then  pay- 
ment date  filed  on  back. 


84 


HIGHER  ACCOUNTING 


From  the  sales  department,  five  vouchers.    Give  them  office  numbers  7,  8,  9,  10,  and  11  in 
the  order  named  below: — 

No.  2,  debiting  Collection  Dept.  $1268    crediting  Merchandise $959.41  Record 

Profit  on  Sales 308.59 

'        Cost  of  Sales 


No.  3, 
No.  4, 
No.  5, 
No.  6, 


Caldwell  &  Co 128.30  terms  cash 

Postmaster 50.00      " 

Star  Newspaper  Agency  190.00      "        " 
M.  K.  &  T.  Ry.  Co 180.00      " 


No.  2  is  merely  a  voucher  recording  the  proceeds  of  the  day's  sales.  Credit  the  two  titles 
given  in  the  general  column. 

Numbers  3,  4,  5,  and  6  call  for  cash  payment.  Make  proper  entry,  crediting  Vouchers 
Payable. 

From  Collection  Department  three  vouchers: — 

No.  2,  debiting  Accounts  Receivable;  crediting  Sales  Department  (in  Dept.  Bal- 
ances Column)... $1268.00  Record 

No.  3,        "        Cost  of  Collection  "  Postmaster - 30.00  Cash 

No.  4,        "  "    "  "  "  C.  &  N.  W.  Ry.  Co.. 60.00      " 

Give  them  office  voucher  numbers  12,  13,  and  14. 

Enter  No.  2,  charging  Accounts  Receivable,  general  column,  and  crediting  Sales  Depart- 
ment in  Dept.  Balances  column.  Observe  that  the  credit  in  department  balances  column  for 
this  voucher  equals  the  similar  debit  for  sales  voucher  No.  2,  and  both  may  be  checked  out. 
All  transfers  of  values  between  departments  are  booked  as  going  through  the  office.  On  any 
given  day,  the  department  balance  debits  will  necessarily  equal  the  department  balance  credits. 
These  columns  need  not  be  considered  further  if  the  debits  and  credits  are  equal. 

Enter  No.  3  and  4,  the  vouchers  to  be  credited,  to  Vouchers  Payable. 

Having  entered  all  vouchers  in  journal,  the  following  transactions  are  to  be  carried  out. 

Enter  checks  for  office  vouchers  Nos.  5,  8,  9,  10,  11,  13, 14.     (Check  Register.) 

The  voucher  payable  is  sent  with  the  check  to  the  payee,  who  receipts  and  returns  the 
voucher.  The  voucher  is  then  checked  on  the  journal  to  show  its  return  to  the  office,  where  it 
is  filed  for  future  reference.  It  is  not  necessary  to  have  all  vouchers  payable  passed  to  the 
payee  for  receipt.  The  checks  for  postage,  mileage  books,  freight,  etc.,  can  be  paid  and  the 
vouchers  retained  in  the  office,  being  merely  approved  by  the  proper  officer. 

The  vouchers  payable  at  a  future  date  are  kept  at  hand  arranged  in  the  order  of  their  ma- 
turities, to  be  paid  when  due. 

Enter  bank  checks  (no  vouchers  attached)  favor  the  following  firms  with  whom  accounts 
current  are  kept  in  the  general  ledger: — 

Kent  Lumber  Co #1000. 

Union  Iron  Co 500. 

Balance  the  check  register,  carrying  the  totals  to  the  general  journal,  entering  the  accounts 
to  be  charged. 

Carry  special  columns  of  general  journal,  except  department  balance  columns,  to  general 
column  and  balance  the  day's  work.     Post  to  ledger,  extending  balances. 

Model  Vouchers  Payable  Account— General  Ledger. 


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Date 


Explanation 


Credits 


Dr.  Balances 


Cr.  Balances 


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FACTORY  ACCOUNTING 


85 


Thursday,  April  4,  190— i         *  C~         '    r 

At  Office.  Received  in  the  mail,  four  letters  containing  cash  remittances  to  be  credited 
in  the  collection  department. 

The  cash  should  be  taken  from  these  remittance  sheets  and  entered  in  a  daily  cash  blotter.  The 
amount  and  date  should  then  be  indicated  on  the  sheets,  which  are  passed  to  the  collection  department 
for  credit.  An  entry  is  made  in  the  general  journal  debiting  cash  and  crediting  collection  department 
(in  department  balances  column,).  This  entry  need  not  be  made  until  all  cash  receipts  for  the  dav 
are  entered.  When  the  collection  department  makes  proper  disposition  of  the  cash,  a  voucher  will  be 
returned,  crediting  the  general  titles  affected  and  debiting  cash.  These  titles  will  be  credited *in  the 
general  journal;  the  corresponding  debit  should  be  checked  with  the  total  of  the  cash  blotter. 

The  total  cash  received  at  office  and  the  names  of  remitters  is  given  on  the  daily  cash 
blotter  below.  As  the  form  of  this  book  is  simple  and  its  use  easily  understood,  it  will  not  be 
considered  further  here. 

Model  Entries  in  Daily  Cash  Blotter. 


Factory.     Received  an  invoice  of  iron  and  steel  from  Union   Iron  Co.,  amounting  to 
$1275.75,  billed  on  open  account.     (Enter  voucher.) 

Enter  voucher  for  freight  expense  bill,  favor  C,  M.  &  St.  P.  Ry.,  on  above,  $55.75. 
Enter  voucher  for  27  Phaetons  at  $78.29,  and  41  Top  Buggies  at  $69.10,  the  cost  of  man- 
ufacture.    Above  vouchers  are  to  be  passed  to  office.     Pencil  footings  should  be  made  in  the 
voucher  register. 

Workmen's  Report.     No.    i   six   hours,  No.  12  seven  hours,  No.  19  five  hours,  No.  31 
four  hours,  Nos.  9,  29.  and  39  absent  all  day.    Others  have  worked  full  time.     Enter. 

Sales  Department.     Received  finished   Phaetons   and   Top  Buggies  from  factory 
valued  at  $4946.93,  factory  cost. 

Enter  voucher,  debiting  Merchandise  and  crediting  the  department. 

Shipped  to  Cyrus  E.  French,  on  sale  at  list  price,  2  Spring  Wagons,  2  Surreys,  3  Road 
Carts. 

Shipped  S.  A.  Jackson,  Elgin,  3  Top  Buggies,  2  Surreys,  4  Road  Carts. 
Shipped  C.  C.  Dallman,  Pine  Ridge,  4  Wagons,  2  Surreys,  1  Top  Buggy. 
Deduct  20  per  cent  as  yesterday. 

Make  voucher  charging  Collection  Department  and  crediting  Merchandise  and  Profit  on 
Sales  with  total. 

Collection  Department.     Enter  a  voucher  for  the  day's  sales  as  shown  on  sales 
book  received  from  sales  department.     Post  the  sales  to  the  sales  ledger. 

Received  from  office  four  remittance  sheets  or  letters  showing  that  cash  was  sent  in  by  the 
following  four  remitters  : — 

Henry  Cushman,       on  account $  600.20 

Geo.  A.  Truman,        "         " 500.40 

Geo.  A.  Truman,        in  full  Note  No.  8 1530.00 

Emerson  &  Gardner,  on  account 495.36 

Daniel  Flowers,         part  Note  No.  13 75.00 

$3200.96 


86 


HIGHER  ACCOUNTING 


C.Ol 1  F.CTION 


Cash 


Bills  Rec. 


Interest 


From  Whom  Reed. 


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Collections  are  received  largely  from  agents  making  payment  on  account,  from  banks  to 
whom  our  notes  have  been  sent  for  collection,  and  from  traveling  collectors.  Each  of  the 
above  should  be  supplied  with  special  forms  on  which  remittances  are  to  be  reported.  The 
special  form  shows  just  how  the  remitter  desired  the  cash  to  be  applied.  These  forms  are 
called  collection  vouchers.  Frequently  letters  are  received  containing  remittances  on  account 
or  on  notes.  These  are  treated  as  though  they  were  regular  collection  voucher  forms.  When 
these  sheets  are  received  from  the  office,  they  should  be  entered  in  the  collection  journal  and 
given  a  collection  journal  number.  This  entry  is  for  the  debit  side  only,  charging  Cash  or 
Bills  Receivable  enclosed.  Having  given  the  remittance  vouchers  collection  journal  numbers, 
with  the  vouchers  in  hand,  post  to  the  sales  ledger  or  the  note  ledger  thus: — 

Turning  to  Henry  Cushman's  account  in  the  sales  ledger,  enter  in  explanatory  space, 
"Cash,  C.  J.  No.  i,  $600.20."    Then  mark  on  the  voucher  "Accts.  Rec.  Cr.  $600.20." 

George  Truman's  remittance  sheet  should  be  taken  first  to  the  sales  ledger,  where  $500.40  is 
similarly  applied.  Mark  on  sheet  "Cr.,  Accts.  Rec.  $500  40."  Then  pass  to  note  ledger,  Note 
No.  8.  There  is  due  on  this  note  $1500  principal  and  $30  interest.  Make  entry  in  payment 
column  "Apr.  4,  2,  1500,  30,  C.  J.  V.  No.  2,"  and  show  on  voucher  a  credit  to  Bills  Rec. 
$1500  and  Interest  $30. 

The  remittance  of  Daniel  Flowers  being  a  part  payment  of  Note  No.  13,  compute  interest  on 
the  note  to  date  at  given  rate  and  enter  the  interest  accrued  in  interest  column  of  bill  book  and 
the  remainder  of  $75.00,  after  deducting  the  interest,  in  the  payment  column,  both  above  the 
writing  line  to  indicate  the  entire  payment  has  not  been  made.     Enter  credit  titles  accordingly. 

So  with  all  other  vouchers  the  application  should  be  shown.  The  vouchers  should  then 
be  returned  to  collection  journal,  placed  in  numerical  order,  and  the  credit  entries  be  placed  on 
this  journal  to  correspond  to  the  cash  already  debited.  The  student,  not  having  these 
vouchers  in  hand,  can  in  this  set  make  the  credit  entries  in  collection  journal  direct  from  the 
application  on  the  sales  ledger  or  the  Bills  Receivable  book. 

Having  entered  the  applications  on  collection  journal,  total  the  debit  and  credit  columns 
of  the  day's  applications  of  cash,  and  enter  in  voucher  register  the  aggregate  entries.  C.  V. 
No.  6. 

Office.     Seven  vouchers  from  departments  require  attention: — 


Factory  V.  No.  5,  debiting  Utifin.  Stock 
No.  6. 

No.  7,        "  Sales  Dept. 

Sales      No.  7,        "         Merchandise 
No.  8,        "  Coll'n.  Dept. 


Col.   V.  No.  5, 
No.  6, 


Acct.  Rec. 
Cash 


crediting-  Union  Iron  Co. 

C,  M.  &  St.  P.  Ry. 
Unfin.  Stock 
' '         Factory 
$1532.00  "         Merchandise 

Profit  of  Sales 
1532.00  Sales  Dept. 

{ Accts.  Rec. 
Bills  Rec. 
Interest 


Co. 


$1275.75 

55.75 

4946.93 

4946.93 

1109.92 

422.08 

1532.00 

1595.96 

1572.20 

32.80 


FACTORY  ACCOUNTING 


87 


JOURNAL 


Where  Applied 

General 

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Accts   Rec 

Bills  Rec. 

Interest 

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On  examining  above  vouchers  two  are  found  requiring  payment,  F.  V.'s  Nos.  5  and  6. 
No.  5  credits  a  firm  with  whom  an  open  account  is  kept  in  the  ledger,  hence  No.  6  is  the  only 
one  to  be  included  in  vouchers  payable. 

Turning  to  the  check  register,  enter  check  for  O.  V.  No.  16,  C,  M.  &  St.  P.  Ry.  Co. 

Make  a  check  favor  Benj.  Norton  for  general  office  expenses,  #50.  A  record  of  the  pay- 
ments made  out  of  this  fund  will  be  kept  in  a  petty  expense  book  (not  considered  further  here). 

Rule  the  check  register  and  journalize. 

Enter  deposit  of  the  day's  receipts  of  cash  in  check  register  and  add  to  bank  balance.  The 
amount,  as  given  previously,  is  $3200.96. 

Carry  totals  of  the  special  columns  (except  department  balance  columns,  which  should 
balance  each  other,)  to  the  general  column,  foot  and  post. 


Friday,  April  5,  190—. 

Factory.     Received  an  invoice  of  leather  and  trimming  material  from  Fiske  &  Jones 
amounting  to  $1675.25,  billed  on  account. 

Freight  bill  from  C,  R.  I.  &  P.  Ry.  Co.  for  above  invoice  $56.29. 

Bot.  of  Oakland  Lumber  Co.,  material  invoiced  at  $1652.99,  on  30  days. 

Bot.  of  Osmond  Iron  Co.,  at  30  days,  material  invoiced  at  $829.64. 

Passed  ten  Top  Buggies  to  sales  department,  estimating  cost  of  manufacture  as  usual. 

Enter  vouchers  for  above. 

Workmen's  Report.     No.  6  six  hours,  No.  26  five  hours,  No.  30  seven  hours,  No.  34 
four  hours,  Nos.  4,  8,  18,  and  25  absent  all  day.    Others  have  worked  full  time. 


$691. 


Sales  Department.     Received  from  manufacturing  department  product  valued  at 


ment. 


Shipped  Geo.  A.  Truman,  regular  terms,  6  L.  Wagons,  3  Spring  Wagons,  4  Road  Carts. 

Shipped  Benj.  Brown,  regular  terms,  3  Surreys,  1  Phaeton,  4  Road  Carts.  2  Spring  Wagons. 

After  completing  sales  book  entries,  enter  voucher  for  day's  sales. 

Enter  voucher  for  advertising  bill  due  Medford  &  Long,  $27.25. 

Enter  voucher  favor  Cadwell  &  Co.  for  stationery  bill  for  use  in  sales  department,  $47.50. 

Enter  voucher  favor  Postmaster  for  postage,  $25.* 

Collection  Department.     Enter  voucher  for  accounts  received  from  sales  depart- 


88 


HIGHER  ACCOUNTING 


Office.  Enter  in  journal  the  eleven  vouchers  from  departments,  after  deciding  which 
are  vouchers  payable  and  which  are  record  vouchers. 

Factory  V,  No.    8,  debiting  Unfinished  Stock;           crediting   Fiske  &  Jones,  $1675  25— Acct. 

"    No.    9,        "               "                   "                          "        C,  R.  I.  &  P.  Ry.  C.  56.29-Cash 

"    No.  10,        "                "                   "                          "        Oakland  Lumber  Co.  1652  99-30  da. 

"    No.  11,        "               "                   "                          "        Osmond  Iron  Co.  829.64— 30  da. 

"    No.  12,        "        Sales  Dept.                                 "        Unfinished  Stock  691.00 

Sales    "    No.   9,        "        Merchandise                               "        Factory  691.00 

"    No.  10,        "        Coll  n.  Dept.        $1376.00           "        Merchandise  953.46 

Profit  of  Sales  422.54 

"   No.  11,        "        Cost  of  Sales                              "        Medford  &  Long  27.25-Cash 

"    No.  12,        "              "        "                                      "        Caldwell  &  Co.  47.50-     " 

"    No.  13,        "             "        "                                      "        Postmaster  25.00-     " 

Coll'n.    "    No.    7,        "        Accts.  Rec.                                 "        Sales  Department  1376.00 

Factory  V.'s  Nos.  g,  io,  II,  and  Sales  V.'s  n,  12,  and  13  are  vouchers  payable.  The 
other  vouchers  require  record  only.  Enter  checks  for  office  vouchers  numbers  23,  29,  30,  and 
3 1  and  carry  total  of  check  register  to  general  journal. 

Close  day's  work. 

Saturday,  April  6,  190—. 

Factory.  Received  60  tons  slack  for  fuel,  sent  by  Blue  Ridge  Mining  Co.,  billed  at 
$1.10  per  ton. 

Received  an  invoice  of  lumber  from  Kent  Lumber  Co.  amounting  to  #2516.25. 

Received  an  invoice  of  paints  and  oils  from  the  Chicago  Paint  Co.,  amounting  to  #265.47, 
on  account. 

Received  an  invoice  of  paints  from  Western  Paint  Co.,  on  account,  #160.21. 

Freight  bills  received  on  two  of  above,  amount  #27.49,  payable  to  C.  &  N.  W.  Ry.  Co. 

Freight  charges  on  another  of  above  invoices,  payable  to  C.,  M.  &  St.  P.  Ry.  Co.,  #129.60. 

Freight  charges  on  last  invoice  above  #4.69,  payable  to  B.  &  M.  Ry.  Co. 

Vehicles  sent  to  sales  department  at  factory  cost,  #1790.60. 

Workmen's  Report.  No.  6  six  hours,  No.  9  six  hours,  No.  10  five  hours,  No.  16  four 
hours,  No.  20  seven  hours,  No.  28  three  hours.     Others  have  worked  full  time. 

After  making  entry  in  time  book,  compute  the  wages  due  each  employee  and  find  the  total 
pay  roll  for  the  week.  The  factory  wages  are  to  be  paid  in  cash.  Enter  a  voucher  for  the  en- 
tire amount  and  pass  it  to  the  office.  At  the  office  a  check  will  be  drawn  for  the  amount  and 
cashed,  receiving  denominations  that  will  make  up  the  amount  called  for  in  the  pay  envelope  of 
each  employee.    In  order  to  make  up  this  list,  the  time  book  is  sent  to  the  office. 

Sales  Department.     Enter  voucher  for  finished  product  from  Factory. 
Enter  the  following  shipments  at  20  per  cent  discount: — 
Geo.  A.  Truman,  3  Phaetons,  2  L.  Wagons,  2  Spring  Wagons. 
Emerson  &  Gardner,  1   Phaeton,  4  Top  Buggies,  7  L.  Wagons. 
Benjamin  Brown,  2  Surreys,  5  Road  Carts. 

Henry  Cushman,  3  Top  Buggies,  7   Road  Carts,  7  Spring  Wagons. 
Cyrus  E.  French,  10  L.  Wagons. 
Enter  voucher  for  the  sales. 

The  time  book  for  this  department,  kept  as  in  factory,  shows  wages  due  #101.20.  Enter 
voucher. 

Collection  Department.     Enter  voucher  for  day's  sales  from  Sales  Department. 
Cash  remittances  for  which  vouchers  have  been  received  from  office  are  as  follows:  — 

From  Henry  Cushman,  payment  open  account #308.00 

"     Daniel  Flowers,  full  payment  Note  No.  13 .  .      67.80 

"     James  Bradley,  part      "  "         "     6 100.00 

"     Edwin  Schuman,  part  "  "         "9 200.00 

"     William  Morris,  full      "  "         "     4 155.20 

#831.00 

Enter  these  items  on  debit  side  of  collection  journal  as  previously  directed. 


FACTORY  ACCOUNTING 


Apply  these  payments,  making  entries  in  ledger  and  bill  book.  In  partial  payments  de- 
duct the  interest  to  date  from  the  amount  of  cash  received  and  apply  the  remainder  to  prin- 
cipal as  done  on  April  4th.  Complete  the  journal  record  and  enter  general  record  voucher  for 
entire  day's  application  of  cash  as  previously. 

Office.  The  student  will  now  assume  that  with  vouchers  from  the  three  departments 
he  is  to  enter  the  day's  work  on  the  general  journal.  Enter  in  the  following  order:  F.  Vs. 
Nos.  13-21;  S.  Vs.  Nos.  14-16;  C.  Vs.  Nos.  8  &  9.  These  may  be  entered  from  the  voucher 
registers.     Kent  Lumber  Co.  and  Western  Paint  Co.  credit  to  open  acct.,  not  V.  Pay. 

Enter  checks  for  office  vouchers  Nos.  37,  38,  39,  41,  44. 

Total  cash  register  and  journalize. 

Compare  blotter  (assumed  to  be  written)  with  the  day's  cash  receipts  as  shown  on  voucher 
from  collection  department. 

Rule  general  journal  and  post. 

Deposit  cash  received  today. 

Monday,  April  15,  190—. 

Factory.  Enter  a  voucher  for  #25  to  be  used  in  miscellaneous  small  expense  pay- 
ments.    These  payments  are  to  be  entered  in  a  petty  cash  book  as  made. 

Enter  voucher  for  invoice  from  Osmond  Iron  Co.,  on  account,  #3,261.29. 

Enter  voucher  for  invoice  received  from  Kent  Lumber  Co.,  $1,296.47,  on  account. 

Enter  voucher  for  salaries  in  this  department,  #350.  Salaries  are  paid  on  the  15th  and 
last  of  month. 

Freight  expense  bills:  for  invoice  from  Osmond  Iron  Co.  is  #216.25,  favor  C.  &  N.  W.  Ry. 
Co.;  for  invoice  from  Kent  Lumber  Co.,  #120.60,  favor  C,  R.  I.  &  P.  Ry.  Co. 

Enter  voucher  favor  Juckett  Coal  Co.  for  60  tons  of  coke,  received  at  #3.90  per  ton. 

Transferred  to  sales  department  at  factory  cost,  20  Phaetons,  20  Surreys,  50  Spring 
Wagons,  100  Lumber  Wagons,  30  Road  Carts. 

Also  sold  refuse  timber  for  cash  amounting  to  $30;  handed  the  cash  to  office  with  memo, 
where  it  will  be  entered  with  other  cash  receipts  of  the  day.  The  amount  of  this  sale  is  to  be 
included  with  the  total  of  finished  product  transferred  to  sales  department. 

Sales  Department.  Received  finished  stock  from  factory  amounting  to  #10,817, 
and  memo  of  sale  of  refuse  timber  amounting  to  #30.     Make  voucher  for  total. 

Enter  the  cash  sale  of  #30  in  sales  book.  The  payment  will  be  reported  to  the  col- 
lection department  from  the  office  later. 

Made  shipments  to  following  agents,  regular  terms  unless  otherwise  indicated: — 

Henry  Cushman,  2  Lumber  Wagons,  2  Phaetons,  3  Road  Carts,  1  Surrey. 

Geo.  A.  Truman,  3  Spring  Wagons,  2  Top  Buggies,  1  Surrey.  Deduct  25  per  cent  in- 
stead of  20  per  cent  from  Truman's  list  prices. 

David  Horton,  3  Road  Carts,  2  Lumber  Wagons,  1  Spring  Wagon. 

Howard  Benton,  Bentonville,  3  Phaetons,  2  Top  Buggies,  1  Spring  Wagon. 

Myron  Young,  10  Lumber  Wagons,  3  Spring  Wagons,  1  Road  Cart. 

C.  E.  French,  8  Phaetons,  6  Surreys,  2  Top  Buggies,  3  Lumber  Wagons,  4  Road  Carts. 

Benjamin  Brown,  3  Lumber  Wagons,  4  Road  Carts,  7  Top  Buggies.  Brown  is  entitled  to 
25  per  cent  commission. 

Emerson  &  Gardner,  3  Spring  Wagons,  4  Lumber  Wagons,  2  Road  Carts. 

Extend  the  above  in  sales  book,  giving  George  A.  Truman  and  Benjamin  Brown  25  per 
cent  discount,  the  others  20  per  cent. 

Sold  for  cash:— 

To  Jens  Jennings,  1  Lumber  Wagon,  list. 

To  Cushing  &  Long,  3  Phaetons  at  list  less  20  and  5  per  cent. 

To  C.  C.  Alderman,  7  Top  Buggies  at  list  less  25  per  cent.  Cash  to  be  passed  to  office 
with  memo  slips. 

Enter  in  sales  book.  (The  cash  is  passed  to  office  with  memo  slips  showing  from  whom 
received  and  for  what.) 

Compute  the  Merchandise  credit  and  the  Profit  on  Sales  credit  for  today.  Include  factory 
sale  in  merchandise  credit.     Enter  voucher. 

The  profit  on  sales  when  odd  discounts  are  given  may  be  found  by  deducting  factory  cost  from 
net  prices. 


90  HIGHER  ACCOUNTING 


Enter  voucher  favor  Star  Newspaper  Agency  for  #215,  charged  to  advertising  account. 
The  expense  accounts  of  three  traveling  salesmen  have  been  reported  in  by  them  and  ac- 
cepted.    Their  salaries  for  the  first  half  of  the  month  are  due  today. 

Enter  a  voucher  for  each,  charging  traveling  expenses  and  salaries  for  first  half  of  month 
as  follows: — 

A.  Rider,  traveling  expenses,     $69.51     Salary,  $75. 
Chas.  Sellers,  "  "  74.26         "   '       50. 

D.  C.  Estes,     "  "  1 2 1. 1 3         "         100. 

Enter  vouchers  for  each  of  above. 

Collection  Department.      Enter  vouchers  for  accounts  on  sales  book  $7105.40. 

The  following  in-mail  has  been  received  through  the  office  and  passed  to  collection  de- 
partment from  customers: — 

Henry  Cushman,  a  letter  with  four  notes  enclosed,  payable  to  him  and  indorsed  to  the  B. 
S.  Wagon  Co.  in  settlement  of  his  invoice  of  April  6th. 

Note  signed  by  G.  Ames,  Corning,  dated  Apr.    8,  time  3  mo.,  $  40  with  int.  at  6% 

"       8,      "    6    "      $120     "         "     6% 
"    A.  Donner       "  "  "      10,      "    9    "      $125     "  "      6% 

"    Oscar  Long    "  "         "       3,      "10    "      $300     "         "      6% 

He  also  sent  cash  $351,  the  total  of  above  to  balance  shipment  of  April  6th. 

Geo.  A.  Truman,  Trenton,  sends  endorsed  notes:  note  signed  by  D.  Green,  Trenton,  dated 
Jan.  6,  time  9  mo.  $200.00  and  6  per  cent,  accrued  interest  $3.30;  note  signed  by  Amos  Keith, 
Trenton,  dated  Apr.  3,  time  7  mo.  $140  with  int.  at  6  per  cent;  note  signed  by  T.  Kinkaid, 
Trenton,  dated  Apr.  6,  time  4  mo.  $85  with  int.  at 6  percent;  he  also  sends  note  signed  by  him- 
self payable  to  the  firm  for  $687.70,  dated  Apr.  13,  payable  in  9  months  at  6  per  cent. 

Accrued  interest  debit  will  not  be  considered  unless  mentioned. 

Benjamin  Brown,  Brunswick,  sends  indorsed  notes  on  account:  signed  by  P.  Williams 
Brunswick,  dated  Apr.  3,  due  1  yr.  $78  and  6  per  cent;  signed  by  S.  S.  Bare,  Derrytown,  dated 
Feb.  13,  due  1  yr.  $225  and  6  per  cent,  accrued  interest  $2.25;  signed  by  A.  Tallman,  Trask, 
dated  Apr.  7,  due  3  mo.  $26.25  and  6  per  cent;  signed  by  David  Doe,  Brunswick,  dated  Mar.  3, 
due  9  mo.  $50  and  6  per  cent. 

Emerson  &  Gardner  send  cash  on  account,  $225. 
Myron  Young  sends  cash  on  account,  $75. 

Cash  has  been  received  to  apply  on  the  following  notes  receivable:  No.  5,  Henry  Schwartz 
in  full  $145.72;  No.  12,  Myron  Young,  to  apply  $500;  No.  7,  S.  Florian,  to  apply  $75. 
Factory — Miscellaneous  sales,  $30. 
Sales  Dept.,  Jens  Jennings,  $90. 

Cushing  &  Long,  $296.40. 

C.  C.  Alderman,  $577.50. 

Enter  all  of  above  on  collection  journal,  giving  each  entry  a  collection  journal  voucher 
number,  then  apply. 

Post  from  the  C.  J.  records  to  the  agents'  ledger  or  the  Bills  Receivable  Book.  If  any 
remittance  in  full  payment  of  a  note  is  a  few  cents  short  in  interest,  consider  the  discrepancy 
due  to  time  of  transmission  through  the  mails  and  cancel  the  note  accordingly. 

Cash  received  in  payment  of  cash  sales  can  be  checked  off  the  sales  book  at  once  without 
any  ledger  entry.  Since  all  sales  are  charged  to  accounts  receivable,  credit  Accounts  Receiv- 
able in  the  collection  journal;  when  they  are  checked  off  enter  the  notes  received  in  the  Bills 
Receivable  book.     Enter  voucher  for  totals  of  the  collection  journal. 

Enter  vouchers  for  the  following  salaries  and  road  expenses  to  date: — 

Henry  Cullerson,  traveling  expenses,  $40.29     Salary,  $60. 

David  Olson,  "  "  51.46         "   '      40. 


FACTORY  ACCOUNTING 


91 


23 
24 

<< 

25 

26 

"            "          " 

27 

It                      <  <                  <  < 

28 

I.I                    II                II 

29 

"    Sales  Dept. 

.  V. 

17 

"    Mdse. 

18 

"    £oll'n  Dept. 

$7105.40 

19 

"    Cost  of  Sales 

20 

"        "     "      " 

21 

(i        <i     <  <      ii 

22 

ii        ii     ii      ii 

.  V 

10 

"    Accts.  Rec. 

11 

"    Cash 

$2365.62 

"    Bills  Rec. 

$2076.95 

"     Interest 

5.55 

12 

"    Cost  of  Collection 

13 

ii        ii      ii           i 

' 

Office.     Enter  eighteen  vouchers  from  the  three  departments. 

In  entering  the  credits  to  traveling  representatives  from  S.  Vs.,  20,  21,  22  and  Col.  Vs., 

12  and  13,  credit  these  persons  on  open  account.     It  is  considered  more  satisfactory   to   keep 

a  ledger  account  with  each  one. 

F.  V.  22      Debiting  Unf.  Stock,       Crediting  Supt.  of  Factory... $      25.00 

Osmond  Iron   Co 3261.29 

Kent  Lumber  Co 1296.47 

Paymaster  350.00 

C.  &  N.  W.  Ry.  Co....  216.25 

C,  R.  I.  &  P.  Ry.  Co. .._  120.60 

Juckett  Coal  Co. 234.00 

Unfinished  Stock 10847.00 

Factory  10847.00 

Merchandise  5263.62 

Profit  of  Sales 1841.78 

Star  News  Agency 215.00 

A.  Rider 144.51 

Chas.  Sellers 124.26 

D.  C.  Estes 221.13 

Sales  Dept 7105.40 

Accounts  Receivable...  3727.40 

Bills  Rec 678.11 

Interest 42.61 

Henry  Cullerson 100.29 

David  Olson 91.46 

Of  the   above   vouchers,  F.    V.  22,  23,  25,  26,  27,  28,  and  S.  V.  19  are  entered  as  vouchers 

payable,  the  other  vouchers  in  the  general  column. 

Enter  checks  for  O.  V.  Nos.  47,  50,  51  and  57. 

Enter  checks  for  remittance  to  the  following  traveling  salesmen  and  collectors,  on  open  ac- 
count:   A.  Rider,  $100;  Chas.  Sellers,  $75;  D.  C.  Estes,  $50;  David  Olson,  #50. 

The  cash  receipts  on  collections  today  per  daily  cash  blotter  amount  to  $2365.62,  which 
should  agree  with  cash  reported  back  from  collection  department. 

Transfer  from  check  register  to  journal. 

Enter  in  check  register  deposit  of  today's  cash  receipts. 

Balance  journal  and  post  the  day's  work. 

April  30,  190-. 

Factory.  Enter  voucher  tor  wages  to  date,  $4839.42.  It  is  assumed  that  the  amount 
is  taken  from  the  time  book.  It  is  to  represent  the  wages  that  would  regularly  be  charged  on 
the  13th,  20th,  and  28th  of  the  month. 

Enter  voucher  for  salaries  in  the  department,  $250. 

Enter  voucher  for  finished  product,  $13261.13. 

As  this  is  the  last  day  of  the  month,  foot  and  rule  the  voucher  register.  See  that  the  total 
of  debit  columns  is  in  balance  with  the  total  of  credit  columns. 

Sales  Department.     Enter  voucher  for  merchandise  from  factory,  $13261.13. 

Enter  voucher  for  salaries  and  traveling  expenses  of  salesmen  as  follows: — 

A.  Rider,  traveling  expenses,    $  72.49    Salary,  $75. 

Chas.  Sellers,  "  "  58.12         "         50. 

D.  C.  Estes,      "  "  148.19         "       100. 

Enter  voucher  for  wages  $21 5.60,  assumed  to  be  taken  from  weekly  time  book. 

Enter  voucher  for  salaries  for  second  half  of  month  $400. 

Sales  today  on  account: — 

Henry  Cushman,  9  Top  Buggies,  10  Road  Carts,  20  Lumber  Wagons,  less  25  per  cent. 

Cyrus  E.  French,  6  Surreys,  6  Phaetons,  less  25  per  cent. 

S.  A.  Jackson,  25  Lumber  Wagons,  less  20  per  cent. 

David  Horton,  10  Top  Buggies,  less  20  per  cent. 

Myron  Young,  16  Spring  Wagons,  12  Road  Carts,  9  Surreys,  less  20  per  cent. 

C.  C.  Dallman.  10  Lumber  Wagons,  3  Top  Buggies,  less  20  per  cent. 

Geo.  A.  Truman,  17  Top  Buggies,  3  Surreys,  4  Spring  Wagons,  less  25  per  cent. 

Emerson  &  Gardner,  15  Road  Carts,  7  Top  Buggies,  12  Lumber  Wagons,  3  Surreys,  less 
25  per  cent. 


92  HIGHER  ACCOUNTING 


Enter  voucher  for  today's  sales. 
Foot,  prove,  and  rule  voucher  register. 

Collection  Department.     Enter  voucher  for  office  accounts  receivable  on  sales 
book,  #13366.25. 

Enter  voucher  for  salaries  to  date,  $270. 

Traveling  collector's  expenses  and  salaries  are  as  follows: — 

Henry  Cullerson,  expenses,  #45.16     Salary,  $60. 

David  Olson,  "  39.12         "  45. 

Close  voucher  register. 

Office.     Vouchers  are  received  from  departments  as  follows: — 


V.  30 

debiting 

Unf.    Stock 

$  4839.42 

crediting  Paymaster 

$  4839.42 

'      31 

" 

<i           << 

250.00 

•• 

1 1 

250.00 

'      32 

" 

Sales  Dept. 

13261.13 

11 

Unf.  Stock, 

13261.13 

V.  23 

(< 

Mdse., 

13261.13 

t< 

Factory, 

13261.13 

'      24 

(1 

Cost  of  Sales 

147.49 

<< 

A.  Rider. 

147.49 

'      25 

it 

it     1  <        K 

108.12 

11 

Chas.  Sellers, 

108.12 

'      26 

•  < 

1 1     1 1        << 

248.19 

1 1 

D.  C.  Estes, 

248.19 

'      27 

<< 

i  (     i  <        <  t 

215.60 

•  < 

Paymaster, 

215.60 

'     128 

1  ( 

<  i     1 «        1 « 

400.00 

" 

1 1 

400.00 

'      29 

1 1 

Coll.  Dept. 

13366.25 

{ 

<  > 

<  i 

Mdse., 

Profit  of  Sales, 

9993.43 
3372.82 

V.  14 

<< 

Accts.  Rec. 

13366.25 

<  1 

Sales  Dept., 

13366.25 

<      15 

<  i 

Cost  of  Colin. 

270.00 

<  1 

Paymaster 

270.00 

•      16 

<  < 

' 

105.16 

<< 

Henry  Cullerson 

105.16 

'      17 

«< 

t<    i<        <  1 

54.12 

1 < 

David  Olson 

84.12 

F.  V.,  30,  31,  S.  V.,  27,  28,  andC.  V.,  15  are  entered  as  vouchers  payable. 

Enter  one  check  in  register  for  five  vouchers  payable  entered  today,  also  give  check  for 

O.  V.  No.  4,  which  will  be  due  tomorrow.     Charge  Depreciation  Acct.  and  credit  Machinery 

and  Tools  accounts  each  with  1  per  cent  of  ledger  balance,  the  estimated  loss  in  value  during 

the  present  month. 

Depreciation  is  the  account  taken  of  the  diminishing  valueof  machinery,  tools,  building,  etc.  All 
of  these  assets  will  decrease  in  value  with  time  and  use.  Some  parts  will  lose  value  more  rapidly 
than  others.  Usually  a  certain  per  cent  of  the  cost  value  is  charged  off;  10  per  cent  per  year  is  often 
very  nearly  the  actual  loss  in  value. 

Enter  a  check  for  #560,  payment  of  salaries  in  the  office  and  charge  to  Office  Supervision. 
Transfer  check  register  totals  to  general  journal  and  complete  day's  work  by  posting  to  general 
ledger.     After  having  posted  to  the  ledger  make  a  trial  balance  from  the  general  ledger  balances. 

This  trial  balance  is  also  a  statement  of  the  business. 

Questions  on  the  Manufacturing  Set. 

1  Into  what  four  departments  of  accounting  is  this  set  divided? 

2  Name  six  or  more  ledger  accounts  that  are  characteristic  of  manufacturing. 

3  Kow  does  the  merchandise  account  differ  from  the  account  as  commonly  used  ? 

4  Define  the  voucher. 

5  What  is  a  record  voucher  ?  A  voucher  receivable  ?    A  voucher  payable  ?   A  voucher 
check  ? 

6  By  what  means  is  the  general  office  notified  of  the  transactions  occurring  in  the  de- 
partments ? 

7  Describe  the  department  voucher  register. 

8  What  are  the  principal  books  used  in  the  factory  ?     In  the  sales  department  ?     In 
the  collection  department? 

9  What  books  are  kept  in  office  ? 

10  Describe  the  general  journal.     The  check  register.     The  general  ledger. 

1 1  Describe  the  Vouchers  Payable  account. 

12  Is  it  necessary  to  enter  all  firm  bills  to  be  paid  in  vouchers  payable  account  ? 

1 3  Why  is  it  desirable  to  enter  as  many  as  possible  in  that  way  ? 

14  How  should  vouchers  payable  maturing  at  a  future  date  be  kept? 
1  5  How  should  vouchers  be  filed  after  final  entry  has  been  made  ? 

16  What  methods  are  used  to  make  the  trial  balance  the  equivalent  of  a  financial  state- 
ment? 


Railway  Accounting. 


Railway  accounting  in  all  of  its  departments,  including  the  books  of  the  auditor  and  super- 
intendents, would  be  too  extended  for  general  study,  and  besides,  the  great  proportion  of  ac- 
countants would  only  be  concerned  with  the  accounting  methods  that  apply  to  the  railway 
stations. 

The  transactions  at  a  railway  station  mainly  consist  of  the  sale  of  passenger  tickets,  check- 
ing of  baggage,  sale  of  sleeping  car  tickets,  shipping  and  receiving  freight,  and  the  collecting 
of  transportation  charges  on  freights  forwarded  and  received. 

Special  Terms  Used. 

The  following  terms  used  in  railway  accounting  may  need  explanation:  Consign^ 
ment,  the  merchandise  included  in  a  shipment;  Consignor,  the  person  or  firm  making  the 
shipment;  Consignee,  the  person  or  firm  to  whom  the  shipment  is  sent;  Unpaid 
Charges,  transportation  charges  not  paid  by  the  consignor  when  the  shipment  is  made; 
Prepaid  Charges,  transportation  charges  paid  in  advance  by  the  consignor  when  the 
shipment  is  made;  Local  Charges,  charges  for  shipment  of  freight  over  the  transportation 
company's  own  line;  Advanced  Charges,  charges  paid  by  the  transportation  company 
to  the  consignor,  or  a  transfer  company,  of  another  transportation  company  when  they  receive 
merchandise  for  shipment,  and  which  they  collect  of  the  consignee,  along  with  the  local  charges; 
Local  Business,  business  between  stations  on  the  transportation  company's  own  line; 
Interline  Business,  business  originating  at  local  stations,  requiring  transfer  to  another 
transportation  company,  or  transferred  by  another  transportation  company  for  delivery  at  some 
local  station. 

The  Books  Required. 

The  agent  in  an  ordinary  railway  station  will  be  required  to  keep  three  general  books  of 
record,  besides  a  number  of  reports  and  abstracts  which  are  forwarded  to  the  general  office  of 
the  company. 

The  Freight  Forwarded  Book  contains  an  itemized  record  of  all  freight  that  is 
forwarded  to  other  stations.  (See  model  form  on  pages  94  and  95.)  In  actual  railroading  the 
way  bill  containing  an  itemized  record  of  a  given  shipment,  is  written  in  copying  ink  and  an  im- 
pression copy  of  the  way  bill  is  made  in  a  forwarding  book,  consisting  of  tissue  sheets  bound 
in  book  form.  This  book,  containing  impression  copies  of  all  way  bills,  gives  a  complete  record 
of  all  outgoing  freights,  without  recording  this  data  in  the  ordinary  method.  In  this  practice 
set  the  way  bill  will  not  be  used  and  the  student  will  make  the  shipping  records  in  the  blank 
book,  which  has  rulings  for  every  column  on  the  way  bill. 

The  Freight  Received  Book  contains  an  itemized  record  of  all  freight  that  is  re- 
ceived from  other  stations  for  delivery  to  local  consignees  or  other  carriers.  In  actual  railroad- 
ing, the  receiving  book  frequently  consists  of  carbon  copies  of  the  expense  bills  which  are  made 
out  for  the  consignees.  In  such  case,  the  consignee  will  sign  the  duplicate  expense  bill,  which 
is  retained  in  the  bound  book,  the  original  expense  bill  being  removed  and  passed  to  the  con- 
signee as  his  freight  receipt.  In  this  practice  set  the  duplicate  expense  bill  and  freight  receipt 
will  not  be  used  and  the  student  will  make  the  receiving  records  in  the  blank  book,  which  has 
rulings  and  headings  for  every  column  required. 

-93- 


94 


HIGHER  ACCOUNTING 


Left  Folio  of  Freight  Forwarded. 


Freight  Forwarded  by  the  B.  C.  R  y.  Co.  from  C^tt^C&^s/  C^-^p       Station 


WAYBILL 


/^>a 


Initial  No. 


CONSIGNOR 


CONSIGNEE 


DESTINATION 


^ 


jtf£ 


&f 


y^^^^^^^^^^^^y:^^^^^^/,^  &£^uzl~4J  &ujr~ 


%tt^  ^e^u^JX/itd^y   &sr?i4i>t 


21 


WrJ"  &^t^4C*^t^t^f 


*\ 


&K*^*~7is/3-4e-^&j&U/  £  '* 


±1 


4_4. 


stfJ/ 


-^d&e^rn-^t^sfh^C^e^    i'^^u^^-^T^-t^jjz^rt^Ji  dj2^rz^CA~ac/ '(ZUJZtT' 


iA 


yq^%2^  ^<£*77r^?a 


/3-£^yU^*-~?z^/ 


x.  d£ 


y // ■  -££&24S,d*£2&£&2k^     i  ^^t^y^^e^w, 


d^-/t£^J-£-    ^V-^t-c^cy 


cJL-4^-n^£/ 


^ 


£_fa  t  ^x<V^^<Ly-^-/S^  <t* 


Left  Folio  of  Freight  Received. 

Freight  Received  by  the  B.  C.  R  y.  Co.  at    &^Z^c^  d^&r~       Station. 


z 


Date  No 


CONSIGNOR 


FROM  WHAT  CITY 


CONSIGNEE 


/ 


Z£- 


(^JU-n'/rj  &M&tp6. 


^Z&±>~nJlr-l£*  ^3^=a^£<^L^£t^^^^^^^- 


yj'yas  Stor^.tfriS* 


'&&  ■  '^iM^i^y^t^t^&0 


r 


A>  /f  - 


'foaA^/J/f 


&£_ 


Ha- 


M. 


/#//>  i 


y/y/ 


&>. 


<^^^^>^^g£^-^^^2^ 


^^g-^^-^^^t^^^^ 


y&^n^^^y  ^•<^@*1b1hd£s3~ 


'2&*Aa£L 


l£  -- 


^W^ 


/^y^jfe^  J^W^^W^^  o^^^^^^^^r-^;^ 


^M 


*& 


^. 


~^7 


/ 


/£-:- 


c>/S7^3-*t^t^<L/ 


sTz-ol*,- 


J'r/ 


'•/fa* 


&L<£. 


-tr^^ea  frZy. 


RAILWAY  ACCOUNTING 


95 


Right  Folio  of  Freight  Forwarded. 


W^^-z^-zpC/     - 

State 

(^^v^t^t/  (&j5s  Division 

1                                                       / 

DESCRIPTION 

WEIGHT 

RATE 

Freight  Charges 

Advances 

Prepaid 

Claim  Number 
(Not  filled  by  agent) 

iJ~l*~-£^y£c<>t7?y)-  y 

^ 

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S* 

*/"> '  \JLf~^L£^*CjeJ 

-y 

Ta>0 

K2 

\d-<?^ 

?3 

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4 

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/J 

6 

f 

/ 

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v/ 

•y^t 

f 

<<3  -y 

£  i 

&*- 

^7 

c^i^t^/  s^tt-^asL^ 

/, 

r-?j 

/ 

iX^*t*v  d*-/££^ 

'/JQ 

/> 

' 

/■0xf 

/> 

' 

dT'U  &ts&tft*t£t&£J 

I 

? '/  0 

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& 

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s&HL^^t,          &*/* 

(//< 

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7 

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'            ) 

y#jUj>^  &&S^6U) 

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f 

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r$ 

ft 

y-^r 

' 

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&■  7* 

2d 

-r 

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/<ff 

r? 

Right  Folio  of  Freight  Received. 


vs£U^/-^y      State  &>rtz2i-4t^Jt 


D 


lvision 


DESCRIPTION 


WEIGHT  RATE  Freight  Charges  Advances 


Disposition  or 
Signature  of  Consignee 


//<-J^^L,t-tz^6 


■£-*/-# 


jL<L 


fo^J^ZS  ^C^L^r7 


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0  0 


// 


cJ^<%C*y  {  /y, 


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J"c>i?  '  ^t/y J?i*<,v \  /<?- 


? 


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J-c/y?*^,  6.  fa. 


96 

HIGHER  ACCOUNTING 

Left  Folio  of  Freight  Cash  Book. 

Dr.                               CASH  RECEIPTS 

No.  of 
W.  B. 

STATION 
From  or  to 

NAME 

WAY  KILLS 

Miscellaneous 
Not  on  W.  B. 

Ticket  Sales 
ind  Baggage 

Way  Bill 

Charges  on 
Freight  Received 

Prepaid  on 
Freight  Ford. 

TOTAL 

|-    m 

-            ^^ 

/      /^? 

/ 

V< 

^L^^n^t^ay^-G^/ 

^^Tt^KC^tA^t^ 

f 

^ 

/f                           A*                        f            M' 

*^&!^?T^tz^yfc£ 

(J  -y 

6  i 

•^ 

>*z^e*-^£<!2&£sit^ 

> 

' 

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4-vi. 

&s&*9te*^/ <&& 

\J^-e^r>t^!^c^^7t2/. 

\s       6 

Y/ 

rf 

Vi^Z^^Oyrt-L^tf^t 

*f         <y 

?/ 

rt 

'r/t 

*   Ur^tt^i^^iy^^' 

'jfatLtZ&i^t  £e*-£*S 

I    6/ 

fv 

7 

/KZ s 

i^^&^t-z^eZJ!*^ 

i 

Kn 

9  4 

i 

ii 

// 

/At! 

A 

ft 

Gd 

23 

fi 

rVSj 

ftT 

<hz^s 

^  /4?Ji 

/ 

l/Tza* 

t 

4/* 

— ■-    ™j 

J/^e^k^/^kf^-*^ 

4    Ml 

^ 

V 

'r. 

&   <&<£^L^4^r?y 

&L*^f^mJtt6L,l 

/ 

1 

^j 

1*fts 

&i/  /3^r^£*<ny/ 

<7                      / 

f~ 

<?  i 

rjy 

%**SjP^£,>>£>sSy 

/ 

/<f 

rrd 

*y 

v?/-0  . 

^/^Ttfr^L/ '&Zy 

,2/L^Stoff£<m*4 

/ 

/r* 

r  i 

/4*a 

^W»lSi^/i« 

•? 

A 

- 

^^a^c^J-^tM^ 

/ 

cfJ'fe 

i 

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J 

/  2^ 

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f 

fa 

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/J"/<S& 

f£ 

/  jrj~ 

W 

*7 

•? 

tft 

7-s 

A 

fj~3  oy 

aJ 

Cash  Entries  for  May  7. 


*sk^L 


2&4&, 


'<££  ?,,  £££2 


^J^£/_^^i2l^^±Zk^^^^i^£kdL^^ 


\£UjC  \{jL 


/L 


jAL 


■3c*>&z^/~<$6L, 


<J  &  y£ 


^> 


is 


<^Lct4X^^Wa( 


z 


J^€A 


/? 


■  Z&edU£d*&* 


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A 


LUZ 


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J^IjL'IA 


L£LZ2.'Jajl£L&a 


Li  7/^J'of 


The  Freight  Cash  Book  contains  a  classified  record  of  all  cash  receipts  and  pay- 
ments, and  remittances  to  the  officials  of  the  company.  The  cash  book  entries  are  grouped  in 
columns  for  the  agent's  convenience  in  making  his  reports  and  his  general  balance  sheet  for  the 
auditing  department. 


RAILWAY  ACCOUNTING 

97 

Right  Folio  of  Freight  Cash  Book. 

CASH  DISBURSEMENTS                          r. 

EXPLANATION 

WAY  BILLS 

Miscellane- 
ous 

Cash 
Remitted 

Vouchers 
Rem.  as  cash 

Date 

Advances  on 
Freight  Forw'd. 

Over  prepaid  on 
Freight  Rec'd. 

TOTAL 

"%^  /.   /'<?*  n 

' 

• 

f* 

ySztast*  a£*i*+££<JL*> 

» 

£^^jL,^j£~ 

/2 

i/rf 

*&?>i^Z&^/j£  ^k^a^^t. 

*S 

/d4a 

fo^J 

/^o 

Lt 

"     /2 

jTc 

/.r^ 

^r 

1??2^z^/  2.  / 1?  07 

r 

fa^J*r&fA*0^rfZ(» 

& 

- 

^U^*<^£  *&;  Ar-a^k^tJ 

&S2r*-6 

// 

f V 

^^ty  rf^ysJ 

^ 

rJ 

'** 

/^?yM&6tf^£>    $*-~0O-*£6CA 

e^£y 

/Jj 

lAJ 

/t 

he 

/J  J 

'/J 

-yyj  ~  //> 

f/ 

71 

i>  o 



>JS 

7* 

/  ¥- 

7^ 

c?  o  7 

T3~ 

Cash  Entries  for  May  7 . 


.<X^fU>^^/^i' d<t^r^ct4u  is 


J£t- 


-y<j  £f 


/  £ya  Vtvaa 


j/tr/^ 


■VcT^f 


cf/7 


££ 


*£'£Z?_ 


XI 


r£ 


//jtj"<?f 


The  cash  book  is  balanced  daily  but,  unlike  other  cash  books,  the  footing  of  each  column 
is  carried  below  the  rulings  for  the  day  and  is  forwarded  from  page  to  page  until  the  close  of 
the  month  or  the  period  for  making  a  balance  sheet. 


Business  Forms  Used. 

The  Shipper's  Bill  and  Receipts,  When  a  consignor  delivers  freight  to  the 
railway  company  for  shipment,  he  usually  brings  a  shipping  book  describing  the  shipment  in 
triplicate,  that  is  an  original  shipping  bill  and  two  carbon  copies,  the  printing  on  the  copies  be- 
ing slightly  different  from  the  original,  but  the  written  part  being  exact  copies.  The  original 
sheet  is  the  consignor's  shipping  bill,  which  is  kept  by  the  railway  agent.  The  carbon  copies 
are  signed  by  the  agent,  the  first  copy  being  removed  from  the  book  and  sent  to  the  consignee 
as  a  bill  of  lading  in  duplicate,  and  the  second  copy  being  retained  in  the  shipping  book  as  the 
consignor's  bill  of  lading. 

Another  form  of  above  is  a  Duplicate  Shipper's  Receipt,  the  original  shipping  bill  and  one 
duplicate  on  the  same  sheet,  the  original  being  removed  by  the  freight  agent  who  signs  the  du- 
plicate which  is  retained  in  the  shipper's  book.  A  bill  of  lading  will  be  required  with  the  du- 
plicate shipper's  book  if  a  copy  is  sent  to  the  consignee. 

The  form  below  represents  the  shipper's  receipt  book  in  triplicate,  the  second  and  third 
copies  except  the  agent's  signature  being  carbon  reproductions  of  the  written  part  of  the  ship- 
ping bill. 

The  Triplicate  Shipper's  Receipt  Book. 


The  Freight  Agent  Will  Detach  This  for  a 

SHIPPING  BILL.. 

iilway  Co. 
Delivered  *f&f**~e*^ 

the.  following  articles  in  good  order,  to  be  delivered  in  like  order,  as 
addressed,  without  unnecessary  delay. 

Comignee^&kriC^ 

Destination _ .<S?C*fe<fc*?^j(fcs?. 


The  Freight  Agent  Will  Detach  This  for  a 

SHIPPING  BILL,. 


'ailway  Co. 
Delivered 

the  following  articles  in  good  order,  to  be  delivered  in  like  order,  as 
addressed,  without  unnecessary  delay. 

Consigneet^ZZL&^^r*?^^ 

Destination .^fkr^rrg^jj^. 


DESCRIPTION  OF  ARTICLES. 


/{U^^^IU^^^?J 


lailway  Co. 

%  ?k^f,/,m 

Received  from. J 

the  following  articles  in  good  order,  to  be  delivered  in  like  order,  as 
addressed,  withont  unnecessary  delay. 

Destination ^^^^S^?^3kf>..t 


WO.  PgGS  DESCRIPTION  OF  ARTICLES.  WEIGHT. 


/S^-^£x(    (Z£^e^~£^ 


..Agent 


the  following  articles  in  good  order,  to  be  delivered  in  like  order,  as 
addressed,  without  unnecessary  delay.      ^ 

Consignee  .<^™^*^^ 

Destination .^Cfe^r^^tg' 


DESCRIPTION  OF  ARTICLES. 


Agent 


-98— 


The  Bill  of  Lading  as  a  distinct  form  is  only  used  when  the  consignor  does  not 
have  a  shipper's  receipt  book  described  on  preceding  page.  Transient  shippers  usually  leave 
freight  for  shipment  without  duplicate  bills,  and  in  such  case  a  bill  of  lading  would  be  delivered 
to  the  consignor  by  the  railway  agent. 

FORM  OF  A  BILL  OF  LADING. 


(BILL  OF  LADING) 


College  City,  May  1,  190 


Business  College  Railway  Company 


RECEIVED  in  apparent  good  order  of. 


Thomas  Johnson 


the  articles  as 


marked  and  described  below.    They  agree  to  deliver  in  like  good  order  and  condition  (the  unavoidable 

dangers  of  fire,  explosion  and   collision  excepted)  at         Ashton 

unto Edward  Sherman Gr  assigns,  Freight     Unpaid    at  the  rate     named  below 


per^ 


cwt. 


MARKS 

DESCRIPTION  OF  MERCHANDISE 

WEIGHT 

RATE 

AMOUNT 

B.  C.  1929 

Household  Goods 

3130 

20 

6  26 

For  the  Company, 


H.  C.  Loring 


Agent. 


The  Freight  Expense  Bill  is  a  description  of  the  freight  and  the  conditions  of 
shipment  with  a  receipt  for  any  charges  that  are  paid  by  the  consignee  when  he  receives  the 
freight. 


(Expense  BUl-Foj^rOEht  Received) 


VoyPT&ghl  Received)  \  ^j 


A 190_ 


Consigned 

TO  THE  BUSINESS  COLLEGE  RAILWAY  COMPANY,  DR. 

For  Transportation  of  Merchandise  as  specified  below  : 


The  written  part  of  the  expense  bill  is  duplicated  in  carbon  copy,  the  printed  portion  being 
changed  so  as  to  constitute  a  receipt  when  signed  by  the  consignee.  The  expense  bill  is 
handed  to  the  consignee  and  the  freight  receipt  is  kept  by  the  freight  agent. 


Consign* 


oratfiom  Goo<t       THE  BUSINESS  COLLEGE   RAILWAY  COMPANY 

The  Merchandise  as  Specified  below : 


Signature 


Consignee. 


-99— 


100 


HIGHER  ACCOUNTING 


£ 

o 

fa 

1 

C 


RAILWAY  ACCOUNTING 


101 


The  Way  Bill  is  sent  with  the  freight  shipment,  giving  a  complete  description  of  the 
property  with  all  information  that  the  receiving  agent  may  require  in  delivering  the  freight  to 
the  consignee.  If  a  freight  shipment  fills  several  cars,  a  separate  way  bill  is  usually  written  for 
each  car.     (See  model  form  on  page  ioo.) 

The  Freight  Notice  is  sent  to  the  consignee,  unless  he  has  engaged  a  drayman  or 
transfer  agent  to  call  at  the  freight  office  daily  for  freights,  notifying  him  of  freight  that  has 
been  received  for  him,  giving  the  consignor's  name,  the  number  of  the  car,  the  kind  of  property 
in  the  shipment,  and  the  amount  of  charges  due  on  the  same.     (See  model  form  on  page    ioo.) 

The  Consignor's  Expense  Bill  is  a  special  form  of  receipt  given  to  the  con- 
signor when  he  prepays  charges  on  a  shipment.     (See  model  form  on  page  ioo.) 

The  Way  Bill  Correction  Sheet  represents  the  correction  of  an  error  on  an 
incoming  way  bill,  discovered  by  the  local  freight  agent  and  sent  to  the  forwarding  agent  for 
correction  on  his  books.  In  the  form  below  the  forwarding  agent  has  made  the  required  cor- 
rection, and  has  signed  and  returned  the  correction  sheet. 


WAY  BILL  CORRECTION  SHEET. 


'Business  College  Railway  Company. 


College  City,  May  7, 


.190, 


Agent:^ 


Central  Citv 


Your  W.  B.  No  _  327 Dated, 

Reads  as  follows: 


May  2, 


IQO   7 


CONSIGNEE 

ARTICLES 

Weight 

Rate 
14.2 

Freight 

Advances 

Prepaid 

Harper  &  Johnson 

Car  Oat  Meal 

32500 

46 

15 

/// 

15 

Should  read: 


CONSIGNEE 

ARTICLES 

Weight 

Rate 

Freight 

Advances 

Prepaid 

Harper  &  Johnson 

Car  Oat  Meal 

32500 

14.2 

46  15 

1       ' 
94  95 

Corrected  as  above, 

Chicago,  May  4, 


.190. 


H.  Lorine, 


John  Johnson, 


.Agent. 


.Agent. 


N.  B.    Agent  after  receiving  this  notice  will  correct  his  books  and  return  immediately  to  Agent 
sending  same. 


102 


HIGHER  ACCOUNTING 


Report  Blanks  Used. 

Abstract  of  Freight  Forwarded.  This  is  a  monthly  or  weekly  summary  of  all 
way  bills  sent  out,  the  shipments  for  each  local  station  being  grouped  together  for  convenience 
of  the  auditing  department  in  checking  up  the  business  of  each  office.  Entries  are  made  in  this 
abstract  sheet  daily  from  the  way  bills  before  they  are  sent  out.  In  practical  railroading  the 
average  number  of  shipments  for  the  given  time  to  each  station  will  enable  the  agent  to 
estimate  the  number  of  lines  for  each  station  on  the  summary  sheet. 

Railway  companies  usually  furnish  their  agents  with  two  sets  of  abstracts  printed  in  differ- 
ent colors,  one  being  used  exclusively  for  local  business  and  the  other  for  interline  business. 
Grouping  the  entries  by  stations  is  only  required  on  local  abstracts,  the  interline  business  being 
grouped  by  the  different  railways  to  whom  shipments  have  been  transferred. 

Form  of  Freight  Forwarded  Abstract. 


Business  College  Railway  Co. 

Abstract  of  Freight  Forwarded  From^r^-^^^jfcg^c^^-Station  \^^-z^-zZy    S^t, 

For^^ Ending        ^^^  _  ^  1 90? 


/ 


WAY  BILL 

CAR 

KIND  OF  FREIGHT 

Date 

No. 

Initial 

No. 

PREPAID 

V 

2~*~^<ZL^^^£4^z>^ 

l&c 

a^£L 

ifezz^ 

./ 

/ 

&4 

2#iJ 

<££*£—* — z^c^^a^^y 

kjT 

7.  f~t 

J\* 

# 

/ 

£ 

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/ 

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A 

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s 

S 

/ 

yj 

&£ 

4&?<J/ 

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if 4 

2^4 

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JJ. 

/*- 

j" 

// 

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/ 

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^/^ 

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/# 

&£ 

/ 

4                            " 

&Jt< 

J~a a 

#6 

/J 

/// 

/oT 

£, 

/yi 

v/<£ 

'laJ.ih 

(Lx^&tzJ 

3/ 

b  <?  c 

^5?, 

JW 

-2/ 

h  a 

'   / 

-A^^^c^^^^y 

Sv   jL-^i^^-TT^/ 

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4&44 

'V 

f 

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/            v               ■    1 

6 

/<fj 

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^0 

7 

/ 

' 

•   ' 

Closing  Entries  on  Freight  Forwarded  Abstract. 


fsn**. 


/ 


*r 


//fL 


&-7£^^£-y 


yj/ 


J 00 


j£f_ 


^ 


Total 


v^  /  0 


il 


%£££ 


/<r/\u 


Abstract  of  Freight  Received.  This  is  a  monthly  or  weekly  summary  of  all  way 
bills  received,  the  shipments  from  each  local  station  being  grouped  together  as  in  the  forward- 
ing abstract.  Separate  interline  abstracts  are  used  for  freight  received,  and  these  entries  are 
grouped  the  same  as  freight  forwarded. 


RAILWAY  ACCOUNTING 


103 


V 


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104 


HIGHER  ACCOUNTING 


Balance  Sheet.  This  is  a  statement  of  all  business  transacted  at  the  station  for  a 
given  period,  some  railways  requiring  their  agents  to  make  balance  sheets  on  the  7th,  14th,  21st, 
and  last  days  of  each  month,  and  other  railways  requiring  only  one  balance  sheet  for  each 
month.     (See  model  form  on  page  103.) 

Besides  these  general  summaries  and  statements,  the  agent  is  provided  with  many  forms 
for  special  reports,  such  as  passenger  tickets,  sleeping  car  tickets,  accident  insurance  tickets, 
milk  tickets,  telegrams,  switching  charges,  list  of  freights  not  delivered,  etc.,  which  will  not 
require  special  explanation,  as  the  rulings  and  printed  headings  will  readily  suggest  the  method 
of  using  each  blank.  We  give  below  one  of  these  model  forms,  which  will  serve  to  illustrate 
the  special  report  blanks.  The  student's  practice  outfit  will  contain  all  report  blanks  required 
in  the  practice  set,  each  form  being  numbered  to  correspond  to  the  reference  number  given  in 
the  balance  sheet. 


Report  for  Switching  Charges. 


Business  College  Railway  Co. 


(Form  No.  352.) 


Report  on  SWITCHING,  CAR  SERVICE.  ETC.  a 

for  Ss-~£^rQ/ Ending 


^^^•^-a«^_Statc^*^^^^^Dlvisio 


190. 


Date  Car  Initial    Car  Number 


AtfJ/ 


///// 


r/jJ 


&r?iAAg/7fZ 


NAME 


fy^L^^t^tf ^-^z^?^eJ 


^ (Z^U^U^^ 


Commodity 


t£2~-tZ_^£s/ 


(2<t^'?Zc^£y 


y< 


zr_ 


if 


z:. 


-#. 


(7d 


Practice  in  Railway  Accounting. 


In  the  following  practice  set,  the  student  is  required  to  make  two  abstracts  and  two  balance 
sheets,  each  including  a  week's  transactions.  We  give  below  fourteen  local  stations,  Central 
City  being  one  terminal  of  the  line  and  the  distance  between  the  terminal  and  the  other  stations 
being  given  in  the  table.  To  find  the  distance  between  stations,  we  would  subtract  the  terminal 
distance  of  one  from  the  other.  College  City  is  printed  in  capitals  to  assist  the  student  in  mak- 
ing all  estimates  from  it  as  his  own  station. 

List  of  Local  Stations. 


Central  City, 

Houston, 

Norton, 

Fairfield, 

Grafton, 

COLLEGE  CITY 

Dover, 

Ashton, 

Logan, 

Benton, 

Easton, 

Marion, 

Kingston, 

Junction  City, 


Terminus  of  the  line. 

Miles  distant  from  Central  City, 


1 80 
185 
190 

195 
200 
225 
250 
275 
300 
400 
500 
600 
700 


Freight  Tariff. 

The  transportation  charges  for  shipment  between  stations  is  estimated  at  a  given  rate  per 
hundred  pounds,  the  rate  varying  with  the  distance  and  the  classification  of  merchandise  in  the 
shipment.  We  do  not  have  space  in  this  book  to  give  a  complete  freight  tariff,  but  will  give  the 
classification  of  some  of  the  standard  commodities,  and  the  rate  per  hundred  pounds  for  each 
of  these  classes  for  twelve  different  distances. 

So  far  as  we  have  given  the  classification  and  the  freight  rates,  they  agree  with  those  act- 
ually in  use  by  railway  companies  in  the  middle  West,  although  the  agreement  of  these  rates 
with  actual  tariffs  would  be  of  little  importance  in  a  practice  set. 

Classification  of  Merchandise. 

We  give  below  sixteen  classes  of  merchandise  for  estimating  freight  charges,  two  items  be- 
ing rated  at  double  class  1.  The  items  are  arranged  in  alphabetical  order,  each  item  being  fol- 
lowed by  its  proper  classification,  the  initials  C.  L.  after  any  item  indicating  that  a  carload  is 
required  to  secure  the  given  classification. 


Apples, 

4 

Eggs, 

Di 

Oranges,  (C.  L  ) 

3 

Bacon, 

4 

Flax  Seed, 

A 

Pork, 

4 

Bananas, 

1 

Flour, 

4 

Potatoes, 

4 

Barley,  (C.  L.) 

B 

Flour,  (C.  L.) 

A 

Potatoes,  (C.  L.) 

5 

Beans,  (C.  L ) 

A 

Hogs,  (C.  L.) 

G 

Prunes, 

3 

Butter, 

Di 

Horses,  (C.  L.) 

E 

Prunes,  (C.  L.) 

4 

Cattle,  (C.  L.) 

F 

Household  Goods, 

,    1 

Raisins, 

3 

Cement, 

D 

Lard, 

1 

Raisins,  (C.  L.) 

4 

Cheese, 

3 

Lemons, 

1 

Rice, 

4 

Cheese,  (C.  L.) 

4 

Lemons,  (C.  L.) 

3 

Rye,  (C.  L.) 

B 

Chickens, 

1 

Lime,  (C.  L.) 

D 

Salt,  (C.  L.) 

D 

Chickens,  (C.  L.) 

3 

Lumber,  (C.  L.) 

C 

Sheep,  (C.  L.) 

H 

Coal,  Hard,  (C.  L 

)  I 

Millet,  (C.  L.) 

A 

Soap, 

4 

Coal,  Soft,  (C.  L.) 

J 

Molasses, 

4 

Sugar, 

4 

Coal,  Slack,  (C.  L. 

;K 

Oat  Meal, 

4 

Syrup, 

4 

Coffee, 

4 

Oat  Meal,  (C.  L.) 

5 

Tea, 

1 

Corn,  (C.  L.) 

B 

Oats,  (C.  L.) 

B 

Turkeys, 

1 

Currants, 

3 

Oranges, 

1 

Wheat,  (C.  L.) 

A 

-105- 


106 


HIGHER  ACCOUNTING 


Local  Freight  Rates. 

In  all  classes  below  except  I,  J  and  K,  the  rate  is  given  in  cents  and  decimal  of  a  cent  per  hundred 
pounds.  Thus,  the  rate  for  five  miles  on  class  1  would  be  fourteen  cents,  class  2  eleven  and  nine-tenths 
cents,  class  3  nine  and  thirty- four  hundredths  cents  per  hundred  pounds.  In  classes  I,  J  and  K  the 
rate  is  given  in  dollars  and  cents  per  ton. 


Distance 

Class  1 

Class  2 

Class  3 

Class  4 

Class  5 

Class  A 

Class  B 

Class  C 

5  miles 

10  miles 

15  miles 

20  miles   

25  miles  _  „ 

50  miles 

75  miles  

100  miles  

200  miles 

300  miles  

400  miles 

500  miles . 

14 
14 
15 
16 
17 
20 
22 
24 
40 
56 
61 

66 

8 
6 
4 

11 
12 
13 
13 
14 
17 
18 
20 
30 
40 
45 
50 

9 

58 

26 

94 

45 

7 
4 
2 

9 
10 
10 
10 
11 
13 
14 
16 
23 
30 
35 
40 

34 
1 
4 
94 

34 
34 
67 

7 

7 

7 

8 

8 

10 

11 

12 

18 

25 

30 

35 

4 
8 
2 
5 

6 

4 

5 

5 

5 

5 

7 

7 

8 

14 

20 

25 

30 

9 
18 

46 
74 
95 

7 
4 
2 

4 
4 
4 
5 
5 
6 
7 
8 

10 
13 
16 
18 

5 

7 

9 

1 

3 

3 

3 

I 

8 

53 

2 

87 

3 

3 

4 

4 

4 

5 

6 

6 

9 

11 

13 

15 

75 
92 
09 
26 

43 
25 

75 

25 

5 

7 

3 

3 

3 

3 

4 

4 

5 

6 

8 

10 

12 

14 

5 

66 

82 

98 

14 

9 

6 

3 

4 

5 

6 

7 

Distance 

Class  D 

Class  B 

Class  F 

Class  G 

Class  H 

Class  I 
per  ton 

Class  J 
per  ton 

Class  K 
per  ton 

5  miles ...  _. 

10  miles 

15  miles _. 

20  miles 

25  miles  _ 

50  miles 

75  miles  ... 

100  miles 

200  miles . 

300  miles 

400  miles 

500  miles 

3 
3 
3 
3 
3 
4 
5 
5 
7 
9 
11 
13 

25 

39 

53 

67 

81 

51 

2 

85 

8 

75 

7 

6 

5 

5 

6 

6 

6 

8 

10 

12 

17 

21 

24 

28 

37 

75 

12 

5 

87 

75 

62 

5 

5 

25 

75 

15 

5 

5 

5 

6 

6 

8 

10 

11 

15 

20 

22 

25 

13 
53 
92 
32 

71 
68 

32 
53 
26 
89 
49 

5 

6 

6 

6 

7 

8 

10 

10 

14 

19 

21 

22 

67 

33 
67 

67 
16 
96 
8 

25 

8 

8 

9 

9 

10 

12 

14 

16 

22 

25 

30 

34 

4 
8 
2 
6 

9 

03 

3 

1 
1 
2 

! 

60 
64 
68 
72 
76 
96 
16 
36 

40 
80 

20 

1 
1 
1 

» 

1 

30 
34 
38 
42 
46 
66 
85 

30 
50 
,0 

90 

1 
1 
1 
1 

25 
28 
31 
34 
37 
52 
64 
74 
04 
24 
34 
44 

Memoranda  for  Practice. 

May  1,  190- 

Cyrus  Martin  delivers  50  cases  Butter,  3000  lbs.,  50  boxes  Cheese,  2750  lbs.,  for  shipment 
to  Western  Produce  Co.,  Central  City,  freight  unpaid. 

The  shipper  prepares  a  shipping  ticket  for  the  agent's  use  and  one  or  more  copies  for  his  own 
purposes.  The  agent  after  verifying  the  weight,  receipts  the  copies  which  the  shipper  retains.  The 
original  ticket  is  kept  by  the  agent  as  a  basis  of  his  entries  pertaining  to  the  shipment.  (See  form  of 
shipping  ticket,  page  98.) 

Load  this  shipment  in  car  B.  C.  R.  No.  2925. 

A  way  bill,  which  is  a  full  description  of  the  shipment,  is  made  out  and  handed  to  the  conductor 
of  the  train  carrying  the  freight,  who  delivers  it  with  the  shipment  to  the  agent  at  the  point  of  destin- 
ation. (See  model  on  page  100.)  Railroads  require  press  copies  of  the  way-bill  at  the  billing  office. 
In  this  course  the  way  bills  are  not  to  be  written,  but  the  entire  written  portion  will  be  entered  in  the 
freight  forwarded  book. 


RAILWAY  ACCOUNTING  10? 


Enter  in  freight  forwarded  book  W.  B.  (Way  Bill)  No.  I.  See  form  pages  94-5.  Turn  to 
classification  and  rate  sheet  for  the  charges. 

A.  M.  Harris  delivers  20  brls.  Flour,  4300  lbs.,  for  shipment  to  Union  Bakery  Co.,  Cleve- 
land, via  Central  City,  over  L.  S.  &  M.  S.  Ry.,  prepaying  freight  to  Central  City. 

This  is  an  interline  shipment;  that  is,  a  shipment  passed  from  one  line  of  railway  to  be  carried  to 
destination  by  another  line.  In  later  interline  shipments  of  this  course,  the  advance  charges  made  to 
or  by  other  lines  will  be  considered,  but  in  this  shipment,  a  simple  delivery  to  the  I,.  S.  &  M.  S.  Ry. 
will  be  made,  since  the  freight  charges  over  our  local  line  are  prepaid.  The  charges  from  Central  City 
to  destination  will  be  collected  from  consignee.     (See  consignor's  expense  bill,  page  100.) 

Load  this  shipment  in  car  B.  C.  R.  No.  2925,  enter  W.  B.  No.  2  in  freight  forwarded  book. 
The  cash  received  on  account  of  this  shipment  should  appear  in  the  freight  forwarded  book,  also 
in  the  cash  book.     (Seepages  94-5  and  96-7.) 

Sherman  &  Lee  deliver  car  B.  C.  R.  No.  4931  loaded  with  shelled  corn,  weight  36240  lbs., 
for  shipment  to  Emerson  &  French,  Central  City,  prepaying  freight  and  paying  switching 
charges,  $2.  Enter  W.  B.  No.  3,  in  freight  forwarded  book  and  cash  book.  Enter  the  switch- 
ing charge  in  report  form  No.  352  and  in  cash  book.     (See  model  form  on  page  104.) 

Jones  &  Smith  deliver  5  brls.  Sugar,  1575  lbs.,  3  bags  Coffee,  453  lbs.,  6  boxes  Soap,  405 
lbs.,  and  5  cases  Oat  Meal,  310  lbs.,  all  for  shipment  to  Patterson  &  Co.,  Benton,  freight  unpaid. 
Enter  W.  B.  No.  4  in  freight  forwarded  book.     Load  in  car  B.  C.  R.  No.  1939. 

To  secure  uniformity  of  results,  items  of  a  single  consignment  will  be  extended  separately,  and 
the  extensions  added  for  entire  charges. 

Howard  &  Payne  deliver  car  B.  C.  R.  No.  11 961,  loaded  with  Barley,  31300  lbs.,  for  ship- 
ment to  Central  Malting  Co.,  Milwaukee,  via  Junction  City,  over  C.  &  N-W.  Ry.,  freight  un- 
paid.    (W.  B.  No.  5.) 

Collection  for  local  freight  charges  will  be  made  from  the  agent  of  the  C.  &  N-W.  Ry.  Co.  at 
Junction  City. 

Collected  cash  for  switching  charges,  car  B.  C.  11961,  loaded  with  Barley  from  Howard 
&  Payne,  $2.     (Form  352  and  C.  B.) 

Receive  in-freight  for  local  consignees,  accompanied  by  way  bills  as  follows: 
W.  B.  No.  327,  dated  Apr.  28,  St.  Paul  car  No.  32941  from  Central  City,  consignor  Wilton 
&  Co.,  consignee  Thomas  Hunter,  4  bx.  Soap,  340  lbs.,  6  brls.  Sugar,  1700  lbs.,  3  brls.  Syrup, 
1300  lbs.,  on  which  unpaid  freight  amounts  to  #6.21.  On  same  bill,  consignor  Wilton  &  Co., 
consignee  Herman  Judson,  15  packages  Bacon,  600  lbs.,  Pork,  1600  lbs.,  and  Flour  850  lbs., 
on  which  unpaid  freight  amounts  to  $5.68. 

The  way  bill  should  be  entered  in  the  freight  received  book.  An  expense  bill  accompanied  by 
receipt  for  freight  is  regularly  made  out  for  consignee.  The  consignee  attaches  his  signature  to  the 
freight  receipt  which  is  retained  by  the  agent,  and  upon  payment  the  expense  bill  is  surrendered  to 
the  former.    The  student  is  not  required  to  fill  out  expense  bills  in  this  course. 

Mark  on  margin  of  the  freight  received  book  the  date  of  delivery  and  enter  in  cash  book 
the  freight  charges  collected,  #6.21,  and  #5.68  in  separate  entries. 

W.  B.  No.  298,  dated  Apr.  25,  from  Junction  City,  consignor  Boyd  &  Lane,  Omaha,  car 
C.  &  N-W.  No.  37654,  loaded  with  Oats,  33560  lbs.,  consignee  Western  Cereal  Co.,  advanced 
charges  #16.25,  local  charges  $52.69,  unpaid.  After  entry  on  freight  received  book,  assume 
that  notice  of  freight  received,  expense  bill  and  consignee's  freight  receipt  have  been  made  and 
delivered,  show  date  of  delivery  on  freight  received  book  and  enter  cash  collected  in  cash  book. 

Passenger  ticket  sales  are  computed  at  the  rate  of  two  cents  per  mile  in  this  course.  The 
distance  between  stations  is  found  on  the  station  list,  from  which  freight  distances  are  computed. 
The  day's  sales  are  entered  in  a  report  (form  353)  and  the  cash  receipts  in  one  item  in  cash 
book.  Compute  and  enter  cash  received  from  sale  of  local  tickets;  to  Central  City,  5,  to  Grafton, 
3,  to  Fairfield,  2,  to  Dover,  2,  to  Marion,  1. 

Local  tickets  come  to  the  agent  in  packages  of  100  for  each  station  of  the  line.  The  num- 
bers begin  at  o  and  end  at  99  in  the  first  package,  other  packages  having  consecutive  numbers. 
Thus  the  number  of  the  ticket  following  the  one  sold  will  indicate  the  number  of  sales  made 
previous  to  that  one.  At  the  close  of  the  day's  work,  the  agent  takes  a  list  of  these  numbers, 
(form  353).  In  checking  up  today's  tickets,  record  on  the  ticket  summary  beginning  with 
Central  City,  5;  Houston,  o;  Norton,  o;  Fairfield,  2;  Grafton,  3;  College  City,  o;  and  the  other 
stations  in  their  order,  2,  0,0,  0,0,  1,  o,  o. 


108  HIGHER  ACCOUNTING 


Paid  cash  to  Henry  Smith  for  time  ticket  No.  5,  $12.50. 

This  payment  is  represented  by  the  time  ticket  which  is  remitted  to  the  treasurer  daily  with  the 
balance  of  cash  on  hand. 

Remitted  cash  balance  and  time  ticket  showing  payment  of  $12.50,  to  the  treasurer. 

Agents  are  allowed  to  retain  a  "working  fund"  of  from  $10  up,  depending  upon  the  office.  This 
fund  is  charged  when  the  office  is  assumed  and  does  not  appear  in  the  cash  book  as  a  balance. 

Balance  the  cash  book  as  per  form  on  pages  96-7. 

The  abstracts  of  freight  forwarded  and  freight  received  should  now  be  prepared.  These 
are  loose  sheets  in  which  are  grouped  under  the  names  of  the  stations  of  the  line  in  their  order, 
all  of  the  freight  received  in  one  set  of  sheets,  and  all  of  the  freight  forwarded  in  another  set. 
The  entries  are  in  the  nature  of  ledger  entries,  charging  or  crediting  each  station  on  account  of 
the  freight  forwarded  to  or  received  from  it.  These  abstracts  are  sent  to  the  general  auditor's 
office  monthly  or  weekly. 

The  spice  on  the  abstract  given  to  each  town  is  determined  by  previous  experience,  as  the 
amount  of  business  between  given  points  is  quite  uniform.  For  the  purpose  of  this  course,  allow  one 
or  more  lines  for  each  station  of  the  received  abstract,  as  follows:  Central  City,  8;  Houston,  1; 
Norton,  1;  Fairfield,  1;  Grafton,  5;  Dover,  I;  Ashton,  2;  Logan,  1;  Benton,  1;  Easton,  1;  Marion, 
1;  Kingston,  2;  Junction  City,  7.  On  the  forwarded  abstract  Central  City,  8,  and  the  following 
stations  in  their  order,   1,  1,  5,  1,  2,  3,  1,  4,  1,  1,  1. 

After  entering  stations  on  both  received  and  forwarded  abstracts,  transfer  from  the  received 
and  forwarded  records  the  work  belonging  to  each.     (See  form  on  page  102.) 

May  2. 

Receive  with  W.  B.  No.  319,  May  1,  car  B.  C.  No.  191 12,  loaded  with  Flour,  31750  lbs., 
from  Star  Milling  Co.,  Marion,  for  Harper  &  Jones,  City,  freight  $42.96,  unpaid.  Compute  the 
freight  charges  to  verify  the  billing  of  the  agent  at  the  shipping  point.  If  correct,  collect  the 
charges  and  make  necessary  entries. 

All  computations  of  a  forwarding  agent  are  to  be  reviewed  by  the  receiving  agent.  In  case  an 
error  is  discovered,  regular  report  forms  are  used,  advising  the  sender  of  his  error.  These  will  be 
taken  up  later. 

Receive  from  the  C.  R.  I.  &  P.  Ry.,  consignor  Courtney  &  Co.,  Decorah,  for  re-shipment 
to  Gordon  &  Co.,  Grafton;  car  C.  R.  I.  &  P.  No.  59261,  loaded  with  Salt,  33200  lbs.,  charges 
unpaid,  including  advanced  charges,  $16.60,  which  you  pay  to  agent  ofC.  R.  I.  &  P.  (Freight 
Forwarded  and  Cash  Book.) 

Harper  &  Jones  deliver  25  brls.  Flour,  5375  lbs.,  for  shipment  to  C.  A.  Gentry,  Logan, 
freight  unpaid;  and  30  brls.  Flour,  6450  lbs.  for  shipment  to  Morgan  &  Wright,  Ashton,  freight 
prepaid.  Ship  both  in  car  B.  C.  R.  No.  191 12,  W.  B's.  No.  7  and  8.  Enter  cash  received  for 
prepaid  freight. 

Receive  with  W.  B.  297,  May  1,  B.  C.  R.  No.  2 121,  loaded  with  Cattle,  19500  lbs.,  from 
Allen  &  Brown,  Benton,  charges  unpaid,  $22.07,  for  re-shipment  over  the  C.  &  N-W.  Ry.  Co. 
to  Stout  &  Lang,  Chicago. 

Enter  freight  charges  collected  from  the  agent  of  the  C.  &  N-W.  Ry.  Co. 

Milk  shipments  in  crates  and  cans  were  received  together  with  C.  O.  D.  milk  tickets,  (or 
milk  way  bills)  for  which  cash  is  received:  (Form  351  and  C.  B.)  From  Ashton,  sundry  con- 
signors and  consignees,  20  ten  gal.  cans  milk  at  21  cts.,  18  eight  gal.  cans  milk  at  16  cts.,  25 
five  gal.  cans  milk  at  14  cts.  From  Dover,  sundry  consignors  and  consignees,  30  twelve  quart 
crates  milk  at  7  cts.,  15  ten  gal.  cans  at  13  cts.,  14  five  gal.  cans  at  8  cts.     (One  item  in  C.  B.) 

Use  present  date  for  all  milk  shipments,  supply  names  of  shipper  and  consignee  if  desired. 

A  special  form  way  bill  is  used  for  milk  shipments.  The  cans  are  given  a  flat  rate  apiece,  the 
rate  depending  on  distance.    Prepaid  milk  tickets  are  also  sold. 

Receive  the  following  in-freight  for  local  consignees:  W.  B.  May  2,  No.  340,  B.  C.  No. 
919,  from  Central  City,  consignor  Clarke  &  Clarke,  consignee  M.  A.  Masters,  6  crates  Bananas, 
450  lbs.,  freight  $r. 80,  unpaid;  Same  W.  B.,  consignor  Clarke  &  Clarke,  consignee  Hunter  & 
Co.,  12  bxs.  Lemons,  950  lbs.,  12  bxs.  Oranges,  1000  lbs.,  freight  $7.80,  unpaid.  Both  con- 
signments are  delivered  and  charges  are  collected.     (Fr't.  Rec'd.  and  C.  B.) 


RAILWAY  ACCOUNTING  109 


Receive  cash  for  ticket  sales:  Houston,  6 ;  Dover,  7  ;  Benton,  5  ;  Kingston,  3  ;  Central  City, 
4.  In  checking  up  today's  tickets,  enter  the  following  numbers  on  the  ticket  summary  sheet : 
Central  City,  9;  Houston,  6;  etc.,  o,  2,  3,  o,  9,  o,  o,  5,  o,  1,  3,  o.     (Form  353  and  C.  B.) 

Receive  cash  for  excess  baggage,  200  lbs.,  to  Central  City,  75  cts ;  100  lbs.  to  Kingston, 
50  cts.     (Form  354  and  C.  B.) 

Paid  cash  for  water  bill,  #2.25,  taking  receipt,  which  is  remitted  as  a  voucher.  (C.  B.  See 
model.) 

Remitted  balance  of  cash  on  hand  and  one  voucher  to  the  treasurer.  Balance  cash  book 
and  carry  totals  down  as  per  form,  pages  96-7. 

Transfer  all  entries  of  freight  received  and  forwarded  to  the  freight  received  and  forwarded 
abstracts. 

May  3. 

Morton  &  Spencer  deliver  4  brls.  Sugar,  1200  lbs.,  and  8  brls.  Syrup,  3000  lbs.,  for  ship- 
ment to  A.  N.  Parker,  Fairfield,  freight  unpaid;  and  4  chests  Tea,  360  lbs.,  5  bxs.  Cheese,  325 
lbs.,  4  brls.  Pork,  1300  lbs.,  for  shipment  to  H.  M.  Allen,  Fairfield,  freight  unpaid.  W.  B.  in 
car  B.  C.  No.  9340. 

Receive  from  C.  M.  &  St.  P.  Ry.,  consignment  from  Pearl  &  Morrill,  Livermore,  for  re- 
shipment  to  H.  A.  Pratt,  Ashton,  20  sks.  Coffee,  3020  lbs.,  paying  advanced  charges  on  same, 
#9.06;  and  same  consignor,  15  brls.  Flour,  3300  lbs.,  for  re-shipment  to  E.  S.  Bundy,  Ashton, 
paying  advanced  charges,  #4.45.     Forward  both  in  car  B.  C.  7241. 

Receive  with  W.  B.,  May  1,  No.  375,  B.  C.  No.  2136,  loaded  with  Oats,  32650  lbs.,  from 
King  &  Barton,  Kingston,  for  Western  Cereal  Co.,  City,  local  charges  unpaid,  #44.08.  If  cor- 
rect, enter  as  delivered  and  collect. 

Receive  cash  for  ticket  sales  :  Junction  City,  5  ;  Central  City,  6 ;  Fairfield,  3  ;  Logan,  2  ;  Graf- 
ton, 15.     Check  up  of  tickets  shows  numbers  as  follows :   15,6,  o,  5,  18,  o,  9,  o,  2,  5,  o,  1,  3,  5. 

Receive  cash  for  switching  car  B.  C.  2136,  Oats,  $2.  Remitted  cash  balance  to  treasurer. 
Balance  cash  book. 

Hereafter,  transfer  daily  to  the  abstracts  all  W.  B.  copies  in  freight  forwarded  and  freight 
received  books. 

May  5. 

The  Western  Cereal  Co.  deliver  car  C.  &  N-W.  No.  31756,  loaded  with  Oat  Meal,  3 121 5 
lbs.,  for  shipment  to  Brown  &  Gordon,  Central  City,  freight  unpaid;  and  car  B.  C.  No.  2136, 
loaded  with  Oat  Meal,  32500  lbs.,  for  shipment  to  Harper  &  Johnson,  Lake  City,  on  the  C.  C. 
&  St.  L.  Ry.,  through  freight,  prepaid  at  regular  rate  to  Central  City,  and  at  20  cts.  per  cwt. 
from  Central  City  to  Lake  City. 

On  this  interline  shipment  the  B.C.  Ry.  agent  at  Central  City  is  to  pay  to  C.  C.  &  L.  C.  Ry.  the 
sum  of  $65.00.  Enter  local  charges  only  in  "Freight  Charges"  column.  L,eave  "advances"  column 
blank  and  enter  total  amount  prepaid  in  prepaid  column. 

Collect  cash  of  Western  Cereal  Co.  for  switching  car  C.  &  N-W.,  31756,  #2.00. 

Receive  from  Junction  City  with  W.  B.,  May  3,  No.  488  car,  B.  C.  No.  6904,  consigned 
by  Sears  &  Co.,  via  C.  C.  &  St.  L ,  from  St.  Louis,  consignee  D.  B.  Edmonds,  College  City,  15 
boxes,  1260  lbs.,  groceries,  shipped  3d  class  rate,  charges  #5.04,  prepaid;  also  from  same  to  Ira 
Denecke,  10  boxes,  864  lbs.,  groceries,  3d  class,  charges  prepaid,  #3.46. 

After  entry,  mark  the  delivery.     No  cash  is  collected. 

Receive  with  W.  B.  May  4,  No.  349,  car  B.  C.  No.  2929,  from  Central  City,  consignor  T. 
C.  Sanders,  consignee  J.  H.  Jones,  5  boxes  Raisins,  150  lbs.,  10  boxes  Prunes,  600  lbs.,  6  boxes 
Currants,  400  lbs.,  freight  unpaid,  $2.65,  for  which  enter  delivery  and  collection. 

W.  B.  May  4,  No.  219,  B.  C.  2029,  from  Logan,  consignor  E.  M.  Sefton,  consignee  A.  M. 
Horton,  100  sks.  Potatoes,  24987  lbs.,  freight  unpaid,  #19.24.      Enter  delivery  and  collection. 

Enter  payment  of  cash  for  sundry  expenses,  #3.75,  authorized  by  the  rules  of  the  company. 
Enter  in  Vouchers  Remitted  column,  (C.  B.)  Make  entry  for  ticket  sales:  Houston,  4;  Fairfield, 
10;  Ashton,  7;  Central  City,  3;  Kingston,  2.  Ticket  numbers  check  up,  18,  10,  O,  15,  18,  o, 
9»  7>  2,  5,0,  1,  5,  5. 

Enter  cash  balance  remitted  to  treasurer.     Balance  cash  book. 


110  HIGHER  ACCOUNTING 


May  6. 

Receive  from  I.  C.  Ry.  car  I.  C.  29376,  Cloverdale  W.  B.  No.  10,  May  5,  loaded  with 
cattle,  21600  lbs.,  for  shipment  to  Swift  &  Co.,  Central  City.  This  is  an  interline  shipment; 
consignor,  W.  B.  Huffman  &  Co.,  Cloverdale,  over  the  I.  C,  to  which  road  you  advance 
charges  to  College  City,  #21.60,  by  giving  to  the  agent  of  I.  C.  Ry.  your  draft  No.  15901  on  the 
treasurer  for  that  amount.     (Form  356  and  C.  B.)     Bill  this  shipment  charges  unpaid. 

The  agent  is  authorized  to  draw  drafts,  for  which  he  is  supplied  with  blank  numbered  forms,  on 
the  treasurer  of  the  company  for  authorized  disbursements,  when  he  is  short  of  cash.  Such  drafts 
are  entered  in  the  cash  book  as  receipts  (miscellaneous  column)  from  the  treasurer,  and  also  on  the 
opposite  side  as  disbursements,  the  column  being  governed  by  the  nature  of  the  payments. 

Receive  W.  B.  May  5,  No.  21,  B.  C.  3704,  from  Ashton,  1  car  sheep,  14620  lbs.,  for  re- 
shipment  over  the  I.  C.  Ry.  to  Kansas  City;  consignor,  D.  Barr,  Ashton,  consignee,  Agyr  Pack- 
ing Co.,  Kansas  City.  Freight  charges  were  prepaid  to  destination  as  shown  by  W.  B.  #44.44. 
The  amount  in  excess  of  local  freight  charges  is  to  be  paid  to  the  second  carrier.  Enter  in 
credit  side  of  cash  book,  2nd  column  (see  model).  Enter  (Form  356)  draft  No.  15902  on 
treasurer  to  make  the  payment. 

Receive  from  Kingston,  W.  B.  May  3,  No.  430,  B.  C.  3847;  consignor,  F.  J.  Dollman, 
consignee,  F.  J.  Dollman,  Chicago,  4  bxs.  H.  H.  Goods  1580  lbs.,  billed  charges  prepaid  to 
Chicago,  #32.75.  Enter  difference  between  local  charges  and  amount  prepaid  as  paid  to  C.  & 
N.  W.  Ry.     Pay  by  draft  on  treasurer  No.  15903. 

Receive  in-freight  for  local  consignees: 

W.  B.  May  5,  No.  216,  car  B.  C.  2882,  from  Grafton,  consignor  Harvey  &  Patterson,  Still- 
water, via  C.  R.  &  D.  Ry.,  consignee  A.  M.  Horton,  Wheat  31000  lbs  ,  freight  #13.95  an(*  ad- 
vanced charges  #5.10  unpaid.  Do  not  enter  delivery  of  this  consignment  until  instructed 
later. 

W.  B.  May  5,  No.  325,  car  B.  C.  9210,  from  Houston,  consignor  E.  C.  Thomas,  consignee 
A.  M.  Horton,  Potatoes  30120  lbs.,  unpaid  #17.29.     This  is  not  to  be  delivered  at  present. 

W.  B.  May  5,  No.  326,  car  B.  C.  9216,  from  Central  City,  consignor  Swift  &  Co.,  for  re- 
shipment  over  I.  C.  Ry.  to  Jordon  &  Co.,  Independence,  10  brls.  Pork  3450  lbs.,  20  cs.  Bacon 
2000  lbs.,  freight  unpaid  #10.14,  which  you  will  enter  collected  from  the  agent  of  the  1.  C.  Ry. 
on  delivery  to  him  for  re-shipment. 

Pay  cash  to  A.  N.  Moore  for  claim  voucher  No.  37298,  #7.50. 

Receive  cash  for  ticket  sales:  Junction  City  3,  Logan  5,  Dover  4,  Fairfield  5,  Ashton  6, 
Central  City  2.     Tickets  check  up  as  follows:  20,  10,  o,  20,  18,  o,  13,  13,  7,  5,  o,  1,  5,  8. 

Receive  cash  for  excess  baggage,  80  lbs.  Junction  City,  75  cts. 

Remitted  balance  of  cash  to  treasurer.     Balance  C.  B. 

May  7. 

Receive  the  following  in-freight  for  local  consignees: 

W.  B.  No.  431,  May  5,  from  Junction  City,  B.  &  M.  car  No.  29216,  loaded  with  Oranges, 
31750  lbs.,  consignor  Riverside  Fruit  Co.,  Riverside,  Cal.,  via  U.  P.  Ry.,  consignee  Central 
Fruit  Co.,  advanced  charges  unpaid  #190.50,  local  charges  unpaid  #127.  Enter  delivery  and 
collection  of  all  charges. 

W.  B.  No.  43  from  Easton,  dated  May  4,  B.  C.  No.  9237,  loaded  with  Hogs  24500  lbs., 
consignor  John  G.  Loomis,  consignee  Western  Packing  Co.,  local  charges  unpaid  #36.26. 
Enter  delivery  and  collection  of  the  freight  charges. 

Receive  W.  B.  correction  sheet  from  the  agent  at  Central  City  advising  overcharge  on 
shipment  May  5,  advanced  charges  from  Central  City  to  Lake  City.  (See  page  101.)  Col- 
lection was  made  for  20  cts.  per  cwt.  which  should  have  been  1 5  cts.  per  cwt.  Enter  cash 
paid  refund  of  #16.25  to  Western  Cereal  Co.  (Form  355  and  C.  B.)  W.  C.  Co.'s  receipt 
should  be  taken  for  this  repayment. 

Payments  of  this  nature,  if  made  before  the  original  transaction  is  reported,  can  be  made  on  the 
books  by  a  correction  entry.  If  the  item  has  been  reported,  the  correction  is  to  be  carried  as  a  cash 
item  until  such  time  as  the  agent  is  relieved  of  it  by  an  inspector.  Frequently  several  weeks  or 
months  even  intervene  before  the  agent  is  authorized  to  charge  cash  items  thus  carried.  The  stu- 
dent will  regard  this  as  a  payment  to  be  carried  on  form  355  until  relieved. 


RAILWAY  ACCOUNTING  Hi 


The  Central  Fruit  Co.  deliver  20  bxs.  Lemons  1500  lbs.,  20  bxs.  Oranges  1700  lbs.,  for 
shipment  to  Landis  &  Crosby,  Kingston,  freight  unpaid.     Forwarded  in  car  B.  C.  No.  3702. 

The  C.  M.  &  St.  P.  Ry.  by  Union  Transfer  Co.  deliver  20  brls.  Flour  4300  lbs.,  and  20 
brls.  Sugar  6640  lbs.,  consigned  by  B.  T.  Babb,  Elyria,  to  Sprague  &  Sons,  Dover,  freight  un- 
paid, on  which  we  pay  advance  charges  #23  88.     Forwarded  in  car  B.  C.  No.  3702. 

Receive  cash  for  ticket  sales:  Houston  6,  Norton  4,  Benton  3,  Junction  City  2,  Central 
City  3.     The  ticket  check  up  shows  the  following  numbers:     23,  16,  4,  20,  18,  o,  13,  13,  7,  8, 

o,  1,  5.  10. 

Milk  shipments  received  for  which  collection  was  made  today :  From  Dale  &  Co.,  Ash- 
ton,  Pasteurized  Milk  Co.,  24  eight-gallon  cans  at  23  cts.     Ticket  dated  May  7. 

Received  cash  for  excess  baggage  to  Norton  50  lbs.,  25  cts.,  Junction  City  100  lbs.,  75 
cts.,  Benton  100  lbs.,  25  cts. 

Enter  remittance  of  cash  to  treasurer.  Balance  cash  book  and  carry  balances  down  as 
per  form. 

The  Balance  Sheet. 

The  agent  is  required  to  forward  a  Balance  Sheet  at  the  close  of  each  month  or  at  the  close 
of  each  week,  the  railroad  weeks  ending  the  7th,  14th,  21st  and  last  of  the  month.  This  bal- 
ance sheet  is  a  summary  of  the  reports  made  out  covering  the  given  period.  Every  report 
represents  the  receipt  of  cash  or  credits  by  the  agent  for  which  he  is  accountable,  or  the  dis- 
bursements or  offsets  by  which  he  is  credited.  The  former  are  placed  on  the  balance  sheet  to 
his  debit,  the  latter  to  his  credit. 

Before  making  up  the  balance  sheet,  report  forms  should  be  footed  and  the  footings  com- 
pared with  the  corresponding  columns  of  the  cash  book.  Some  columns  of  the  cash  book 
represent  more  than  one  report,  as  the  third  on  the  debit  side,  which  is  made  up  of  report  forms 
Nos.  351,  352  and  356. 

Foot  the  Freight  Charges,  Advances  and  Prepaid  columns  of  the  abstracts 
of  freight  forwarded  and  freight  received.  These  footings  should  prove  with  similar  footings  of 
freight  forwarded  and  freight  received  books. 

List  all  undelivered  in-freight  for  which  collection  has  not  been  made  on  form  357. 

List  on  form  350  the  cash  and  vouchers  remitted  as  cash  since  last  similar  list,  excluding 
those  not  yet  credited  in  the  general  offices  during  the  current  period.  (Exclude  remittances 
of  May  6  and  7.) 

On  form  353,  extend  the  total  number  of  tickets  sold  during  the  period  into  "Tickets 
Sold"  column,  the  prices  in  the  following  column  and  the  amount  and  total  in  the  last  column. 
This  total  with  the  total  of  form  354  should  equal  the  fourth  column  of  cash  book. 

Having  footed  and  compared  with  cash  book  all  reports,  enter  same  in  the  balance  sheet — 
debit  or  credit  side  as  the  nature  of  the  report  requires.     (See  model  on  page  103.) 

Enter  in  credit  side  of  balance  sheet  the  remittances  made  during  the  period  that  are  not 
included  in  form  350. 

It  will  be  observed  that  the  items  aggregating  #479.98  are  carried  over  to  the  next  report 
as  a  charge  against  the  agent. 

When  the  balance  sheet  is  completed  it  is  to  be  signed  and  forwarded  together  with  all 
abstracts  and  reports  from  which  the  balance  sheet  is  made  up. 

May  8. 

Harper  &  Jones  deliver  10  brls.  Flour  2170  lbs.,  for  shipment  to  Thomas  Olson,  Junction 
City,  freight  unpaid.  Ship  in  car  B.  C.  No.  2137  J  a^so  same  shippers  send  25  brls.  Flour  5375 
lbs.  for  shipment  to  A.  N.  Parker,  Fairfield,  freight  unpaid.  Ship  in  car  B.  C.  No.  4932.  (En- 
ter Freight  Ford.,  Freight  Reed.,  and  Freight  Cash.) 

Howard  &  Payne  forward  car  B.  C.  No.  12460  loaded  with  Barley  32600  lbs.,  consigned 
via  Junction  City,  C.  &  N.  W.  Ry.  to  Central  Malting  Co.,  Milwaukee,  unpaid. 

The  Central  Fruit  Co.  forward  to  J.  E.  Overfield,  Kingston,  15  bxs.  Lemons  1200  lbs., 
prepaid  W.  B.  in  car  B.  C.  No.  2170. 

Deliver  the  consignment  received  on  the  6th  inst.  Wheat  31000  lbs.  to  A.  M.  Horton,  col- 
lecting charges.  , 


112  HIGHER  ACCOUNTING 


Receive  from  C.  M.  &  St.  P.  Ry.  Co.  one  car  their  No.  23070  containing  33670  lbs.  Lime 
consigned  by  Crescent  Lime  Works,  Crescent  City,  to  C.  C.  Donner  &  Co.,  Ashton,  charges 
collect,  on  which  we  have  advanced  to  the  first  carrier  $18.74. 

Receive  W.  B.  May  6,  No.  354,  M.  &  O.  car  No.  31080  for  Western  Packing  Co.,  1  car 
cattle  22900  lbs.  from  Central  City,  consignor  Coe  &  Jones,  Minneola,  over  M.  &  O.,  local 
charges  collect  $ ,  advanced  charges  collect  $43.70. 

Receive  W.  B.  May  7,  No.  76,  car  B.  C.  No.  1 2006  from  Carver  &  Lane,  Houston,  40000 
lbs.  Corn  consigned  to  Jones  &  Luberger,  charges  collect. 

Receive  W.  B.  May  8,  No.  5,  car  B.  C.  3962  from  J.  M.  Coleman,  Dover,  12  cs.  Cheese 
480  lbs.  charges  billed  45  cts.  prepaid,  consigned  to  the  College  City  Jobbing  Co. 

Deliver  three  consignments  received  today  collecting  cash. 

The  agent  at  Dover  miscalculated  the  freight  on  College  City  Jobbing  Co.  shipment.  Collect 
the  difference  making  regular  entry  and  consider  advice  of  same  sent  to  Dover  through  a  correction 
sheet. 

Received  cash  for  switching  charges  : 

Car  B.  C.  12640  Howard  &  Payne,  Barley,  $2.00 

"    M.  &  O.  31080  Western  Packing  Co.,  Cattle,      2.00 
"    B.  C.  12006  Jones  &  Luberger,  Corn,  2.00 

Milk  ticket  collections  today:  From  D.  &  Co.,  Ashton,  to  P.  Milk  Co.,  16  eight-gallon 
cans  at  23  cts.,  20  twelve-quart  crates  at  9  cts.;  from  C.  &  Co.,  Dover,  to  P.  M.  Co.,  25  five- 
gallon  cans  milk  at  14  cts. 

Passenger  tickets  sold  today:  Houston  7,  Junction  City  3,  Logan  1,  Grafton  72,  Central 
City  11. 

Enter  the  last  ticket  numbers  from  previous  form  353  in  forwarded  column,  then  in  the 
following  column  the  ticket  numbers  in  the  order  of  stations  thus:  34,  23,  4,  20,  90,  o,  13,  13, 
8,  8,0,  1,  5,  13. 

Received  cash  for  excess  baggage  75  lbs.,  Central  City,  50  cts.;  1  bicycle,  Junction  City, 
75  cts.;   1  baby  cab,  Houston,  25  cts. 

Remitted  to  treasurer  cash  on  hand. 

Close  the  cash  book. 

Do  not  carry  totals  of  cash  columns  forwarded  from  previous  cash  book. 

May  9. 

Receive  in-freight  as  per  way  bills : 

From  Ashton,  consignor  Dodge  &  Ashby,  consignee  A.  Partridge  &  Co.,  W.  B.  May  8, 
No.  13,  B.  C.  1 3 120,  12  era.  Chickens  1800  lbs.,  freight  prepaid  billed  $2.60. 

From  Junction  City,  consignor  Caldwell  &  Cone,  consignee  Western  Packing  Co.,  W.  B. 
May  7,  No.  521,  B.  C.  8303,  1  car  Hogs  24650  lbs.,  freight  unpaid  $54  85. 

Receive  from  Junction  City,  consignor  P.  Garver,  Dallas,  via  A.  T.  &  S.  F.,  consignee 
Western  Packing  Co.,  W.  B.  May  7,  No.  522,  A.  T.  &  S.  F.  28364,  car  of  Cattle  28940  lbs., 
freight  $73.77  and  advanced  $87.34  unpaid. 

From  Benton,  consignor  The  Westlake  Co.,  consignee  W.  Lincoln,  W.  B.  May  8,  No.  16, 
car  C.  M.  &  St.  P.  149376,  1  car  Lime  37600  lbs.,  chgs.  $18.24  unpaid. 

After  entry  in  freight  received  book,  re-compute  the  local  freight  charges  finding  two 
errors.  In  your  record  make  a  circle  around  the  incorrect  in-billing  and  place  the  correct 
amount  above. 

Then  deliver  and  receive  correct  cash  for  the  freight  charges  of  the  four  in-shipments  en- 
tered today,  collect  also  any  shortage  in  prepaid  freight. 

It  is  assumed  that  you  send  a  W.  B.  correction  sheet  to  each  agent  who  bills  charges  incorrectly 
from  any  cause.  The  agent  in  error  can  thus  correct  his  mistakes  frequently  before  it  is  necessary  to 
report  on  them. 

Deliver  car  B.  C.  9210  received  May  6,  to  A.  M.  Horton,  collecting  charges  as  per  W.  B. 
Also  collect  $1.50  for  car  service,  the  car  having  remained  one  day  longer  than  the  48  hours 
allowed  for  unloading.     (Form  352  and  C.  B.) 

Paid  E.  A.  Beach  claim  department  voucher  No.  139264,  $42.78,  and  G.  Caldwell  freight 
department  voucher  No.  58908,  $13.24. 


RAILWAY  ACCOUNTING  113 


Enter  switching  charges :  Car  B.  C.  8303,  Western  Packing  Co.,  Hogs.  #2.00;  car  A.  T. 
&  S.  F.  28364,  Western  Packing  Co.,  Cattle,  #2.00.    * 

Ticket  numbers  in  order  are  as  follows:     37,  41,  4,  23,  129,  o,  13,  13,  13,  9,  4,  1,  5,  17. 

Enter  cash  from  day's  sales. 

Remit  cash  and  balance  as  previously. 

May  10. 

Forward  freight  from  shippers  as  follows : 

From  Harper  &  Jones  to  C.  E.  Gentry,  Ashton,  25  brls.  Flour,  5375  lbs.,  forwarded  in  car 

B.  C.  5463,  unpaid. 

From  Clinton  Anderson  to  Clinton  Anderson,  Houston,   10960  lbs.  H.  H.  Goods,  car  B. 

C.  6201,  prepaid. 

From  Amos  Ford  to  Mary  D.  Collins,  Central  City,  7590  lbs.  H.  H.  Goods,  W.  B.  23,  car 
B.  C.  6201,  one-half  prepaid,  one-half  unpaid. 

Interline  from  I.  C.  Ry.  car  I.  C.  58021,  consignor  D.  B.  Cunningham,  Overberg,  to  Em- 
erson &  French,  Central  City,  1  car  38796  lbs.  Shelled  Corn,  advances  paid  $20.64,  charges 
collect.     (C.  B.) 

From  R.  B.  Cole  to  D.  R.  Collins,  Easton,  1  car  Lumber  36980  lbs.,  B.  C.  6848,   prepaid. 

From  R.  B.  Cole  to  Simon  Olson,  Dover,  1  car  Lumber  28040  lbs.,  car  B.  C.  9374,  un- 
paid. 

Interline  from  L.  L.  Ry.,  consignor  D.  Crowley,  Ottumwa,  to  Armour  &  Co.,  Junction 
City,  car  L.  L.  5907,  load  Sheep  16090  lbs.,  advances  $20.16,  unpaid. 

From  Churchill  Mercantile  Co.  to  Wendell  Hill,  Grafton,  4  bxs.  Prunes  320  lbs.,  10  bxs. 
Soap  800  lbs.,  1  cs.  Raisins  100  lbs.,  5  brls.  Flour  1 100  lbs.  All  W.  B.  28,  B.  C.  4307,  charges 
collect. 

Freight  received  from  Logan,  W.  B.  May  9,  No.  243,  B.  C.  4944,  consignor  Conner  & 
Lennan,  consignee  C.  Thies,  car  Millet  32900  lbs.,  billed  prepaid  $34.02.  Make  necessary  cor- 
rection in  amount  of  freight,  and  after  substituting  the  correct  amount  for  the  in-billing  as  given, 
leaving  the  prepaid  column  as  billed,  assume  a  correction  sheet  sent  by  you  to  the  agent  at 
Logan. 

Receive  from  Ashton  W.  B.  17,  May  8,  B.  C.  9388,  one  car  Slack  (coal)  40000  lbs.,  con- 
signor Juckett  Coal  Co.,  consignee  City  Water  Works,  unpaid. 

Deliver  the  two  shipments  received,  collecting  cash  for  the  latter. 

Ticket  numbers:     42,  43,  7,  29,  141,  o,  16,  14,  13,  9,  6,  5,  6,  22. 

Enter  cash  for  sales. 

Collected  excess  baggage,  Marion,  100  lbs.  $1.50;  Grafton,  50  lbs.  25  cts.;  Benton,  100  lbs. 
50  cts. 

Collected  switching  charge  B.  C.  9388,  City  Water  Works,  Slack,  $2.00. 

Paid  Amos  Cushman  time  ticket  No.  74,  $19.12. 

Paid  D.  B.  Coleman  claim  voucher  No.  141 3 12,  $3  96. 

Refunded  to  Central  Fruit  Co.,  an  overcharge  of  advances  paid  by  them  May  7,  on  the 
entire  bill  amounting  to  $317.50.  The  advance  charges  should  have  been  $158.96,  making  a 
difference  of  $31.54,  which  you  are  advised  by  the  agent  at  Junction  City  to  refund.  (Enter  in 
Form  355  and  Misc.  column  of  C.  B.) 

You  are  authorized  by  the  auditor  to  credit  the  refund  made  by  you  to  Western  Cereal 
Co.,  May  7,  off  the  agent's  debit  balance.  (Enter  in  Misc.  columns  debit  and  credit  of  cash 
book  and  check  both  items  to  indicate  that  no  report  will  be  made  on  them.) 

Remit  to  treasurer  and  close  cash  book  as  usual. 

May  13. 

Receive  in-freight  as  follows : 

W.  B.  May  1 1,  No.  469,  B.  C.  No.  100 18,  consignor  Larimore  &  Co.,  Central  City,  to  E. 
K.  Fassett,  16  bxs.  Soap  4800  lbs.,  charges  $8.93,  collect. 

W.  B.  May  11,  No.  469,  B.  C.  No.  10018,  consignor  Larimore  &  Co.,  Central  City,  to 
Great  Western  Hotel,  20  brls.  Sugar  6200  lbs.,  $11.53,  charges  prepaid. 

W.  B.  May  10,  No.  216,  B.  C.  9201,  shipped  by  Leo  Varnes,  Marion,  to  E.  K.  Fassett,  16 
brls.  Apples  3450  lbs.,  freight  prepaid,  $6.13. 


114  HIGHER  ACCOUNTING 


W.  B.  May  10,  No.  732,  B.  C.  No.  108 13,  Farmer  &  Souls,  Star,  via  M.  &  O.,  Junction 
City,  to  Western  Packing  Co.,  College  City,  1  car  Cattle  28960  lbs.,  advance  charges  #24  1 1 
and  local  charges,  collect. 

W.  B.  May  10,  No.  733,  B.  C.  No.  7921,  consignor  Caldwell  &  Cone,  Junction  City,  to 
Western  Packing  Co.,    1  car  Hogs  64390  lbs.,  freight  unpaid  $143  27. 

W.  B.  May  12,  No.  183,  C.  P.  No.  93668,  consignor  Newell  &  Lane,  Grafton,  to  E.  K. 
Fassett,  12  cs.  Cheese  9680  lbs.,  $12.06,  charges  collect.      (Correct  W.  B.  as  explained  before.) 

W.  B.  May  It,  No.  29,  B.  C.  No.  3941,  consignor  Ray  Fallon,  Norton,  to  Ray  Fallon, 
College  City,  H.  H.  Goods  3864  lbs.,  freight  $6.03,  unpaid. 

W.  B.  May  10,  No.  448,  B.  C.  No.  6230,  consignor  Baird  &  Lee,  Central  City,  to  Perkins 
&  Son,  4  sks.  Coffee  429  lbs.,  4  brls.  Sugar  1661  lbs.,  charges  $3.89,  collect. 

W.  B.  May  10,  No.  448,  B.  C.  No.  6230,  M.  Field  &  Co.,  Central  City,  to  E.  K.  Fassett,  3 
bxs.  Prunes  421  lbs.,  4  sks.  Rice  408  lbs.,  total  charges  unpaid  $1.73. 

W.  B.  May  10,  No.  329,  S.  P.  No.  1093960,  consignor  California  Fruit  Co.,  Los  Angeles, 
over  S.  P.  Ry.  via  Junction  City,  to  Central  Fruit  Co.,  1  car  Oranges  29680  lbs.,  advances 
$136.41  and  local  freight  charges  computed  at  $108.72,  unpaid. 

W.  B.  May  10,  No.  592,  B.  C.  No.  3260,  Sears  &  Co.,  St.  Louis,  over  the  C.  C.  C.  &  St. 
L.  via  Junction  City,  to  D.  B.  Edmonds,  10  bxs.  misc.  Groceries,  billed  as  3d  class,  890  lbs., 
charges  $3.56,  prepaid. 

Receive  from  Junction  City  W.  B.  May  IX,  No.  613,  S.  P.  No.  39261,  shipper  Bennett  & 
Lane,  to  Silverton  &  Co.,  Pittsburg,  Pa.,  1  carload  Prunes,  weight  40020  lbs.,  freight  prepaid 
$209.87.  Reshipped  over  C  &  N.  W.,  paying  excess  of  prepaid  freight  over  local  charges  by 
draft  No.  15904  on  treasurer. 

Enter  delivery  of  the  four  consignments  to  E.  K.  Fassett,  together  with  cash  for  correct 
freight  charges  where  collectible. 

Deliver  the  two  consignments  to  Western  Packing  Co.,  collecting  cash  as  called  for. 

Ticket  numbers,  46,  43,  10,  41,  163,  o,  20,  19,  22,  11,  10,  14,  9,  28. 

Remitted  the  cash  balance  to  the  treasurer. 

May  14. 

The  balance  sheet  for  the  week  may  now  be  taken.  Fill  report  forms  including  form  350 
in  which  are  entered  two  days'  remits  from  last  week.  Omit  the  remittance  of  1 3th  from  this 
report  as  not  yet  credited.  The  over  prepaid  freight  on  freight  received  book  of  May  10,  $10, 
may  be  entered  in  balance  sheet  without  any  report. 

Having  completed  the  balance  sheet  and  reports,  both  are  to  be  forwarded  to  the  auditing 
department. 

Questions  in  Railway  Accounting. 

1 .  What  are  the  principal  duties  of  the  station  agent  ? 

2.  What  is  understood  by  the  term  local  shipment?    inter-line  shipment?    consignment? 
consignor  ?  consignee  ?  freight  charges  ?  advanced  charges  ? 

3.  Describe  the  freight  cash  book. 

4.  How  are  records  of  freight  forwarded  and  freight  received  kept  ? 

5.  Describe  the  freight  abstract. 

6.  Name  eight  representative  report  forms  in  which  are  entered  details  of  the  business 
in  the  office. 

7.  Describe  the  balance  sheet. 

8.  How  is  the  balance  sheet  made  up? 

9.  How  are  items  in  the  balance  sheet  tested  by  the  cash  book  ? 
10.     How  often  is  a  balance  sheet  prepared? 


Wholesale  Accounting. 


Wholesaling  has  to  do  with  the  purchase  of  merchandise  in  large  quantities  from  the 
manufacturer,  producer,  or  jobber,  and  the  sale  of  the  same  to  dealers  in  quantity  to  supply 
the  consumer. 

A  wholesaling  system  of  accounting  should  include  a  purchase  department,  a  sales  depart- 
ment, a  credit  and  collection  department,  and  a  general  department. 

The  Purchase  Department. 

Purchases  of  merchandise  are  made  through  purchasing  agents,  and  by  correspondence. 
A  copy  of  every  order  sent  out  for  goods,  should  be  kept  in  the  office.  When  the  merchan- 
dise ordered  has  been  received,  the  invoice  should  be  compared  with  the  order.  The  quantity 
and  kind  received  should  also  be  carefully  compared  with  the  invoice. 

Terms  of  credit  differ  among  different  firms  and  in  different  lines  of  business.  As  a  rule 
in  all  lines  of  business,  cash  discounts  are  offered.  As  cash  discounts  represent  a  reduction 
in  cost  more  than  equal  to  the  interest  worth  of  the  cash  required  to  make  payment,  it  is 
assumed  that  firms  in  good  standing,  having  cash,  or  being  able  to  borrow  cash,  will  take  ad- 
vantage of  ail  discounts  offered.  The  accounting  plan  of  this  set  requires  merchandise  to  be 
charged  at  net  cost. 

In  order  to  make  payment  at  the  right  time  the  exact  date  of  payment  of  each  bill  is 
emphasized  in  the  accounting  scheme.  A  voucher  for  each  payment  is  filed  in  such  a  way  as 
to  appear  as  a  reminder  upon  the  settlement  date. 

To  illustrate  the  purchase  and  payment  system,  a  bill  of  merchandise  from  the  Central  Drying 
&  Canning  Company  is  ordered,  entered,  and  paid  for  as  given  below. 


An  Order  for  Merchandise. 


Order  No 


*£L 


M_ 


Kindl'f  send  at  once 


rC^>^>t^C^    ^^<n^<^^^t^f  9^^&--<L^i^^y    (Or. 

.vV^^^ 


~nd  bill  on  the  following  terms  u 


(^tiL^^Cy 


-% 


'yj^&/ 


t^    ^.JL^rJs^/     d^^-^^^^ 


&A 


/J^L^x-^jlJl^^lsl^/ 


AC, 


¥J£d*d^ka£&ittd*&. 


The  above  order  should  be  in  duplicate.     The  original   copy   is  sent  or   mailed  and  the 
duplicate  retained  for  comparison  with  the  invoice,  when  the  goods  are  received. 
In  reply  to  this  order  the  invoice  on  page  1 16  is  received. 


-115- 


116 


HIGHER  ACCOUNTING 


Invoice  of  Merchandise. 

THE  CENTRAL  CANNING  AND  DRYING  COMPANY 

MANUFACTURERS  OF 

CHOICE  DRIED  AND  CANNED  FRUITS 

JAMS,  JELLIES,  PRESERVES,  ETC. 

Sold  to     c-   A-  Carpenter  &  Co.,  Shipped  per    B.   &  0.  Ry. 

College  City, 


Tormx-     2/30    n/60 


Hillsdale,  Ohio, gov-   5» 190jL 


125 
75 
40 
40 
40 


cs.  Stan.  Peaches 

bx.  Dried  Ap.  (3750  lb.) 

cs.  Straw.  Jam 

"  Blk. 

"  Rasp. 

Less  3  per  cent 


1 

15 
06 

143 
225 

75 

1 

60 

64 

1 

40 

56 

1 

50 

60 

548 

75 

16 

46 

532 

29 


After  checking  the  merchandise  delivered  with  the  invoice  and  verifying  the  prices  and 
extensions,  the  description  of  the  invoice  is  transferred  to  a  voucher  form  as  shown  on  page 
117.     The  invoice  itself  is  filed  or  pasted  in  an  invoice  book  for  reference. 

After  a  description  of  the  bill  is  entered  in  voucher  form  as  shown  on  page  1 1 7,  the 
voucher  is  removed  from  the  stub  and  folded  so  as  to  show  the  two  parts  of  the  reverse  side 
as  illustrated  in  the  upper  part  of  the  form  on  page  118.  The  lower  part  of  the  form  shows 
the  filing  memoranda  at  top  of  vouchers  when  they  are  placed  in  the  clip  where  they  will 
remain  until  maturity.  In  this  clip  are  placed  all  of  the  vouchers  payable  arranged  in  the  order 
of  their  maturity.  As  in  the  illustrated  clip  it  will  be  seen  that  two  payments  assumed  to  be 
entered  after  voucher  No.  47,  are  to  be  paid  before  it  and  hence  are  placed  above  it  in 
the  clip.  Voucher  No.  31  is  to  be  paid  November  29;  and  No.  49,  is  to  be  paid  December  1 . 
Voucher  No.  47,  maturing  December  3,  is  placed  next. 

The  Voucher  Journal  is  so  called  because  it  has  special  columns  for  journalizing 
Vouchers  Payable.  Special  columns  may  be  arranged  in  the  journal  for  as  many  ledger  titles 
as  are  frequently  repeated.  In  the  present  journal  we  have  special  columns  for  Cash  debits  and 
credits  and  for  Merchandise  debits,  thereby  avoiding  the  necessity  for  cash  book  and  purchase 
book. 

From  the  voucher  stub  on  page  1 17,  a  journal  entry  would  appear  as  follows: 

VOUCHER  JOURNAL 


Vouchers 
Payable 


sZ^t-^ 


^r  /  f*>4Z_ 


Vouchers' 
Payable 


*J~J/  £ 


v/>/ 


4jt 


WHOLESALE  ACCOUNTING 


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118 


HIGHER  ACCOUNTING 


Reverse  Side  of  the  Voucher  and  the  Filing  Clip. 


WHOLESALE  ACCOUNTING 


119 


The  ChecK  Register  gives  complete  data  regarding  all  checks  that  are  drawn  and 
all  deposits  in  bank  with  a  column  showing  bank  balances.  Business  houses  using  a  check 
register,  generally  use  voucher  checks  which  do  not  have  stub  entries  and  regular  checks  in 
pads  without  stubs.  In  such  case  the  check  is  entered  in  the  check  register  before  it  is  delivered 
or  sent  to  the  payee. 

At  maturity  the  voucher  payable  on  page  117  would  be  filled  out  in  the  check  form  on  the 
back  of  the  voucher  as  illustrated  in  the  left  upper  form  on  page  118.  It  would  then  be  entered 
in  the  check  register  like  the  second  line  in  form  below. 

At  maturity  the  voucher  is  taken  from  the  file  and  entered  in  the  check  register  thus: 


CHECK 

R] 

EGISTER 

-Date 

PAYEE 

Fol. 

CHARGE 

:v<k 

No. 

General 
Dr. 

Mdse.  Dr. 

Votith 
No. 

Vouch.  Pay. 
Dr. 

Deposits 

Withdrawals 

Balances 

c=dU^y 

/ 

0^^_^^>-^ 

'J~Z» 

/^fza 

J 

&*&L*As@*<A& 

2^v 

*? 

.f~2  1 

U 

J-zj 

fa 

<?9*2<£ 

(ZiJhf^rz^ 

T 

/ 
If 

#* 

1  a 

MS 

?? 

fJ~* 

/4 

^2i/*v^v  H, 

# 

n> 

//?/> 

/  <?a 

tf*J~o 

// 

^P*?l4l£^2t*Z7t-4 .  Csj 

lfa€6^sU*Z*,#^M_  MiA 

ter; 

Zf 

tf* 

2/  >/* 

/2~S>7/* 

'&sd> <?*^l^c?r*) 

-jb^to-n-ic&ye^ 

r& 

Sh 

^T<? 

-?■?/ 

76 

^C^JLe~-*--#^?  *-&o. 

fo-^t^toiSx  &<LtlJ-^ 

r& 

/Za 

ia 

/2t> 

/f 

b  v/^r  *J^ 

A-  •         * 

'* 

)2^f 

r/ 

2-/0 

it 

2/c, 

5  * 

*V/iV 

^fe^^A 

t*A> 

// 

/ 

/offj/f 

\ 

tfa 

/// 

2/ 

fa 

ffa 

f  ^ 

//!>?/ 

/* 

J 

<Z*z^y 

<£^£*^tJ  d^£&  %? 

<Zi 

So 

2o 

/  06/ itS 

_ 

After  entry  in  the  check  register,  the  voucher  payable,  now  a  voucher  check,  is  forwarded 
to  the  payee,  who,  on  presenting  the  voucher  check  to  the  bank,  must  endorse  the  check  and 
sign  the  attached  receipt. 

At  the  end  of  the  month  all  paid  voucher  checks  will  be  returned  by  the  bank.  They  may 
then  be  checked  by  numbers  on  the  journal  and  filed  numerically  for  future  reference. 

Vouchers  Payable  account  in  the  ledger  is  to  be  credited  with  the  total  of  vouchers  payable 
column  of  the  journal  and  charged  with  the  total  of  vouchers  payable  column  from  check 
register. 

The  Sales  Department. 

A  sales  system  may  have  a  general  form  suited  to  any  business  although  it  must  conform 
in  details  to  the  nature  of  the  business  in  hand.  Orders  to  wholesale  houses  are  received  (1) 
through  the  mail  from  customers  direct,  (2)  through  traveling  salesmen,  (3)  at  the  desk  in  per- 
son given  by  local  customers.  A  loose  leaf  duplicating  set  of  order  sheets  or  bills  is  most  satis- 
factory, because  duplicates  of  original  data  rather  than  transferred  data  can  be  used  for  records, 
thus  saving  time  of  transfer  as  well  as  avoiding  the  liability  of  error  in  copying. 

Orders  through  the  mail  should  be  carefully  inspected  at  the  office  when  received  and  such 
explanations  inserted  as  will  guard  against  any  error  on  the  part  of  the  shipping  clerk. 

In  the  shipping  department  the  items  are  cased  and  shipped — the  marked  routing,  check- 
ing, and  data  on  the  order  showing  that  this  has  been  done.  When  the  order  does  not  give 
exact  quantities,  these  should  be  entered  on  the  order  sheet  by  the  shipping  clerk. 

The  filled  orders  are  then  passed  to  the  biller  who  fills  invoices  in  duplicate — the  originals 
for  the  customers  and  the  duplicates  to  be  retained.  The  latter  are  placed  in  a  loose  leaf  holder 
from  which  the  charges  are  posted  to  the  customers'  accounts.  The  amounts  of  the  bills  are 
carried  to  a  monthly  summary  sheet,  there  footed  and  the  total  posted  to  the  general  ledger. 

By  another  method,  order  sheets  supplied  to  salesmen  and  by  them  filled  and  returned  to 
the  house,  are,  after  passing  the  shipping  room,  returned  and  bound  as  a  permanent  sales  rec- 
ord.    This  method  can  only  be  used  when  the  salesman's  order  gives  exact  weights  or  quanti- 


120 


HIGHER  ACCOUNTING 


ties  of  all  items  ordered.  If  this  method  is  used,  it  would  be  unnecessary  to  keep  copies  of  the 
bills.     The  monthly  summary  of  sales  is  taken  from  these  sheets.   . 

Some  wholesale  houses  follow  the  earlier  custom  of  copying  the  bills  in  a  bound  sales 
book. 

The  amount  and  kind  of  business  done  will  govern  the  method. 

The  following  form  illustrates  the  steps  of  recording  a  sale  and  collection  by  the  first 
method  given  above.     An  order  is  received  as  given  below: 

Order  from  Channing  &  Co. 


Kindly  send  at  once,  via 

and  bill  on  the  following  terms 


^9-^^S^  f?^ 


C-~^£-^<t&L^&>L^7^7-^ 


The  order  sheet  is  received  by  the  credit  man  or  office  manager,  who  stamps  on  the  upper 
right  hand  margin  of  the  sheet  the  form  for  memorandum  entries.  He  should  fill  the  first  four 
blanks,  giving  the  date  received,  from  what  salesman  or  by  mail,  credit  O.  K.,  and  terms  of 
payment. 

The  order  sheet  is  then  passed  to  the  shipping  clerk,  who  selects  the  goods,  checking  the 
items  sent  and  writing  the  net  weights  or  quantities  when  these  are  required.  He  fills  in  the 
fifth  and  sixth  lines  in  the  stamped  form,  giving  shipping  route  and  date  of  shipment. 

Order  with  Memoranda  for  Shipping  and  Billing. 


Order  No 


Kindly,  send  at  once.  via. 


&K?74/^f21,  f^ 


and  bill  on  the  following  terms 


(]!^?-*£&^Z^<r?L*/ 


• 

S 


-2£ 


3    U*^  &#  <2l~/*u^Z7 


I  0.3 

f  oo 


ye^^J 


"Xoo* 


~ 


Vv  ^  Lf, 

vCo-1* 


jgfl*  ^o- 


&. 


Jk2_ 


WHOLESALE  ACCOUNTING 


121 


The  order  sheet  is  next  passed  to  the  billing  clerk,  who  enters  the  prices  of  the  items  in  the 
order  sheet  and  makes  bills  in  duplicate  from  the  order  sheet.  He  makes  a  check  mark  in  the 
seventh  line  of  the  stamped  form,  to  indicate  that  the  order  has  been  billed.  The  last  line  of 
the  stamped  form  is  for  the  letter  file  number  if  a  system  of  filing  letters  is  used. 

Bill  in  Response  to  Channing  &  Co.'s  Order. 


Ship  by 


*~&y?£&r- 


Terms 


?J>  -6* 


Credit 


M 


_£__15<L^ 


^y^z^^^^^^u-rc/ 


Bought  of  Q  A.  Carpenter  &  Co. 


Salesman- 


Wholesale  Dealers  In 

GENERAL  MERCHANDISE. 


Number 


Date  of  Order 


Ledger  Folio 


Shipper's 
Check 


Qjan'.i'.y 


Weight 


PrtC 


^ 


Z^ ■  -^^yC- ^j/^^z^-Tal-i*-^^^^-^ 


2  <?<J 


.2  4 


lA^U 


Is 


2  a  <? 


.fjA 9S~c 


^ 


.J*J/  yjr<£^^J 


^JZiJe 


/  &J~t 


^^/^-^       tr  ^j 


/  z  <? 


j/&     j/-j~# 


/i/ 


*J_ 


The  original  is  passed  to  the  mail  and  the  duplicate  is  placed  in  a  binder.  From  the  dupli- 
cate the  posting  is  carried  to  the  customer's  account  in  the  sales  ledger.  This  book  is  prefer- 
ably of  standard  ledger  ruling  to  allow  of  free  explanation  in  both  debit  and  credit  sides,  which 
a  wholesaling  customers'  ledger  requires.  The  model  account  given  below  shows  the  entries 
that  should  be  made  in  the  explanatory  columns  of  the  sales  ledger. 


JL 


%&*.  y** 


p 


&z 


££ 


/£«*-*f  ,y 


3^p?EW^T 


£z 


/J*       /£* 


£ 


\3 


£ ^Aa 


1* 


26 


LL. 


¥<?  £<? 


/J- 


V£_ 


VJc 


la/x 


Jjj. 


(/  0 


d^ 


jl/  elxtrJi^i 


&'m     ^1 


u+ 


3-9/Jo 


Ll 


& 


.1/ 


x 


JL£\ 


€t*r 


'-7 


e;  ja£a  * 


1 


^s- 


&c£- 


^fcjg- 


'4- 


kj2_ 


If- 


2 


Xlx 


uiL 


&.: 


t^ 


%L 


%*  Vt, 


2* 


&<Or    7 


/&JZ<si^?7J*^>-i>-r&< 


-^ 


-7-3 


snr 


/ 


122 


HIGHER  ACCOUNTING 


The  model  ledger  account  gives  on  the  debit  side  the  date,  terms,  bill  number,  and  amount 
of  charge  for  each  shipment  made.  The  explanation  space  on  the  credit  side  allows  for  such 
matters  as  pertains  to  credit  by  items  or  collection  memoranda.  It  will  be  noted  that  the  bill 
given  above  is  the  ninth  debit.  Previous  bills  are  balanced  off  by  credits,  are  in  process  of 
collection,  or  are  still  unpaid.  An  X  mark  is  placed  before  such  bills  as  are  paid,  for  reference 
when  statements  are  rendered. 

The  Credit  and  Collection  Department. 

Credits  on  account  are  usually  received  in  the  form  of  cash  remitted  by  the  customer,  dis- 
counts for  prompt  payment,  cash  collected  by  sight  draft,  notes  to  apply  on  account,  and  re- 
turned goods.  All  of  the  above  are  conveniently  entered  in  a  credit  register  from  which  post- 
ing is  made  to  the  customer's  accounts. 

CREDIT  REGISTER 


4^£ 


z  /-  -    ¥t&6jL^~.  j„^<*4< 


REMITTER 


•*P 


?7Z4ts£^&a-£££>-ur-tt/ 


-*^gt<  <*~ 


2-f/sJf 


2_tA 


WSis1-TA^C£\^-><l^   £7*^72^ 


/££-t>— gti^ 


&Cc^f. 


IjT 


S/-1- 


U.\ 


^^-^Azt£^1>nzA^J  & 


&/r<d *-#Lf^-J 


~<£&j6.  7 


</cZ. 


■-^Z^L^^y^*-™^ 


£^^^e^aL^ZJ 


^U/VeS 


/f/L 


£L 


<-"'  r 


*Z-i? 


^f^^^^-^^*^^'^ 


-^-*-6 


-Lt 


-/<c£Zs</^ 


2<S~f  ^ 


(E^uCt^yyT-^t^rty 


tCL-&-^K-^a-^«~-if 


L£A 


£*• 


\J 


2* 


1J2. 


£A 


LLLLLL 


4*J~S 


s7f   c/es-e    nj 


,±4_ 


%} 


/ /f6?i 


cM-sC*L>*^~^l5i     <Z-C<^&£+  -TKZsts? 


s 


// 


C-^££^-t*£c^?ty 'k  ^f!^-«*<t^<^«/ 


\fa 


/A^rs 


£j~*J 


*M 


Cash  should  ordinarily  be  transferred  to  the  journal  daily,  while  other  columns  of  the  credit 
register  are  footed  and  journalized  at  close  of  month.  It  follows  that  the  cash  total  above, 
representing  the  month's  receipts  is  to  be  checked  out  as  already  transferred. 

The  returned  goods  register  contains  an  itemized  list  of  goods  returned  showing  by  whom 
sent,  to  apply  on  what  invoice,  and  a  column  for  return  profit  computed  at  the  rate  of  profit 
used  when  the  goods  were  sold. 

RETURNED  GOODS  REGISTER 


*^ 


.LCL 


J^cZg^  %-jg.^Su^  ^^,  /' 


J?   £*J 


-~*^^~e^^^£/-g^wy 


^Z. 


*A 


^r^J^y  j^t~Y  a^^-^^/  z^a*    .f# 


i_2  2./? 


y#4 


/  ^f->"? 


j£/.^ 


/  */£>  f~~o 


J~* 


3  2- 


SJL. 


&a 


WHOLESALE  ACCOUNTING  123 


The  General  Accounts. 

The  General  Ledger  accounts  will  include  the  following  titles  : 
C.  A.  Carpenter,  partner  Office  Expenses 

Student,  partner  Traveling  Expenses 

Cash  Salaries 

Merchandise  Cost  of  Shipping 

Sales  Ledger  Interest  and  Discount 

Bills  Receivable  Discount  to  Customers 

Furniture  and  Fixtures  Collection  and  Allowances 

Vouchers  Payable  C.  A.  Carpenter,  personal 

Bills  Payable  Student,  personal 

Profit  of  Sales  Peter  Henderson 

General  Expenses 
Enter  these  accounts  in  the  General  ledger  in  the  order  given,  allowing  one-quarter  page 
to  each. 

Ordinarily  posting  is  made  to  the  general  ledger  but  once  monthly.  Some  accounts  re- 
quire posting  by  items  instead  of  by  monthly  totals.  Either  standard  or  four  column  balance 
ledger  ruling  may  be  used  advantageously  in  the  general  ledger.  In  this  set  the  standard  ledger 
is  given. 

Practice  in  Wholesale  Accounting. 

November  1,  19  — 

C.  A.  Carpenter  and  the  student  have  formed  a  partnership  as  wholesale  dealers  in  gro- 
ceries under  the  firm  name  of  C.  A.  Carpenter  &  Co.  Each  partner  is  to  receive  a  salary  of 
#100.00  per  month.  After  payment  of  this  salary,  the  net  gains  and  losses  are  to  be  shared 
by  each  in  proportion  to  this  average  investment.  C.  A.  Carpenter  invested  a  stock  of  merchan- 
dise, inventoried  at  #5,160.25  for  which  amount  he  is  to  receive  full  credit,  and  cash  #839.75. 

The  student  invested  cash  #1500.00. 

Make  opening  entry  in  the  journal. 

Deposited  all  cash  in  the  bank. 

Make  an  entry  in  the  check  register  as  in  model  page  119. 

Received  an  invoice  of  merchandise  from  Kephart  &  Co.,  Philadelphia,  dated  October  29, 
amounting  to  #501.50,  on  account  60  days,  with  a  discount  offer  of  1^  per  cent  if  paid  in  10 
days. 

Make  out  Voucher  No.  1,  descriptive  of  this  bill  and  enter  payment  date  as  10  days  from 
October  29.  Deduct  the  cash  discount  at  once  and  make  entry  in  voucher  journal  as  shown 
on  model  page  1 16.  After  entry,  the  voucher  should  be  placed  in  the  maturity  clip  awaiting 
payment. 

Received  an  invoice  of  tea,  coffee,  etc.,  of  Grant,  Kennedy  &  Co.,  New  York,  dated  Octo- 
ber 29,  amounting  to  #1,459.74.     Terms,  60  days,  2  per  cent  10  days. 

Enter  as  above  using  voucher  No.  2. 

Received  of  Diamond  Match  Co.,  City,  an  invoice  of  matches,  dated  November  1,  amount- 
ing to  #139.50.     Terms  1-10  n-30. 

Fill  and  enter  voucher  No.  3.  In  filing,  place  this  voucher,  which  should  be  paid  Novem- 
ber 1 1 ,  after  the  vouchers  maturing  on  a  previous  date.  Hereafter  file  all  vouchers  payable  in 
the  order  of  their  maturity. 

Received  from  N.  K.  Fairbank  &  Co.,  City,  an  invoice  of  soap,  dated  October  3 1 ,  amount- 
ing to  #567.40,  billed  2-10  n-30. 

Received  an  invoice  of  flour  dated  October  28,  from  Great  Northern  Milling  Co.,  Minneap- 
olis, amounting  to  #631.25,  billed  I  *^-io  n-30  ds. 

Preparatory  to  selling,  date  a  daily  profit  sheet  November  1,  and  copy  in  it  from  the  text 
the  buying  and  selling  prices  of  the  day.  See  page  125.  From  these  enter  in  the  profit  or 
difference  between  buying  and  selling  prices.  Use  the  selling  prices  for  today's  billing.  Take 
note  that  where  the  selling  is  based  on  quantity  per  hundred  pounds,  your  billing  should  be 
per  pound. 


124 


HIGHER  ACCOUNTING 


Buying  and  Selling  Prices. 

ARTICLES  SOLD 

PER 

Nov.  1, 

19 — . 

Not.  6, 

19 . 

Nov.  10 

19 . 

Cost 

Selling 

Cost 

Selling 

Cost 

Selling 

Dried  Fruits 

Apricots 

cwt. 

9 

45 

11 

945 

11 

9 

60 

11 

Currants 

cwt. 

5 

70 

7 

525 

6 

50 

5 

65 

7 

Dates 

cwt. 

7 

45 

8 

795 

8 

50 

8 

40 

9 

Figs 

cwt. 

10 

45 

12 

1040 

12 

10 

85 

12 

50 

Peaches 

cwt. 

12 

45 

14 

12  45 

14 

12 

45 

14 

Prunes,  Cal. 

cwt. 

11 

45 

12 

10  90 

11 

50 

5 

55 

5 

Prunes,  Turk. 

cwt. 

7 

55 

8 

790 

8 

50 

8 

40 

9 

Raisins 

cwt. 

7 

95 

9 

7 

95 

9 

8 

9 

Mill  Products  and  Cereals 

Corn  Meal 

sack 

40 

55 

40 

55 

40 

60 

Chop  Feed 

cwt. 

75 

1 

15 

75 

1 

10 

75 

1 

10 

Flour,  Acme 

brl. 

3 

50 

4 

60 

3 

65 

4 

65 

3 

65 

4 

65 

"      XX 

sack 

85 

1 

05 

85 

1 

05 

90 

1 

10 

"      Graham 

sack 

46 

60 

46 

60 

50 

65 

Oat  Meal 

cwt. 

2 

98 

4 

3 

4 

2 

98 

4 

Rice,  Carolina 

cwt. 

6 

30 

7 

50 

6 

75 

8 

6 

75 

8 

Nuts 

Almonds 

cwt. 

15 

35 

20 

15 

35 

20 

15 

50 

20 

Brazil 

cwt. 

8 

35 

11 

8 

80 

11 

50 

9 

35 

12 

Eng.  Walnuts 

cwt. 

10 

35 

13 

11 

20 

14 

11 

20 

14 

Filberts 

cwt. 

8 

85 

10 

50 

9 

20 

11 

9 

20 

11 

Pecans 

cwt. 

12 

35 

14 

12 

35 

14 

12 

35 

14 

Sugar  and  Syrups 

G  Sugar 

cwt. 

5 

37^ 

6 

5 

37^ 

6 

5 

40 

6 

A       " 

cwt. 

4 

95 

5 

50 

4 

95 

5 

50 

4 

95 

5 

$0 

C       " 

cwt. 

4 

50 

5 

4 

50 

5 

4 

50 

5 

Molasses,  N.  O. 

gallon 

25^ 

28 

25 

28 

26 

29 

Syrup 

gallon 

30^ 

34 

31 

35 

31 

35 

Teas  and  Coffees 

Tea,  Japan 

cwt. 

32 

37 

50 

31 

40 

37 

31 

40 

37 

"     Y.  H. 

cwt. 

34 

42 

34 

42 

36 

43 

Coffee,  Java 

cwt. 

17 

20 

19 

17 

20 

19 

17 

20 

19 

Rio 

cwt. 

9 

90 

11 

9 

10 

10 

9 

10 

10 

Sundries 

, 

Salt,  Sk. 

sack 

08 

10 

08 

10 

08 

10 

"     Brl. 

brl. 

86 

1 

10 

86 

1 

10 

86 

1 

10 

Soap,  Laundry 

box 

1 

40 

2 

10 

1 

40 

i 

2 

10 

1 

40 

2 

10 

WHOLESALE  ACCOUNTING 


125 


Daily  Profits. 

By  estimating  the  profit  on  every  article  sold,  the  accountant  can  compute  the  total  profits 
on  sale  for  each  day.  If  Merchandise  account  is  credited  only  with  the  cost  of  goods  sold,  the 
debit  balance  will  show  the  cost  of  merchandise  unsold  at  any  date. 


WHOLESALE  OFFICE 

DAILY  PROFIT  SHEET 

SXJt^Z* 

4 

.190.... 

Vertical  List  of  Items 

Articles  Sold 

Per 

Cost 
Per 

SeTTing 
Per 

Quantity 

Profit 
Per 

Gross 
Profit 

Dripd    Fruits 

(Zf>t^ 

<? 

Ks 

'// 

/ 

Jj 

^/?ft 

rsk* 

Currants 

// 

S 

ft 

_£ 

W6 

/ 

J<? 

J. 

33 

Yo0* 

Flates 

* 

7 

^ 

f 

¥-0  0 

rj 

'     2 

Xo 

J"0-*r 

j-i 

// 

/  a 

& 

A2 

JTa 

/ 

\fi 

7<f 

/  r"* 

/0  6* 

Pearhps 

// 

/2 

¥j 

/¥ 

IJT* 

/, 

rj 

'     2. 

43 

loo* 

Primps,  Pal. 

'/ 

// 

+3 

U 

#J1> 

' 

n 

/ 

0. 

Prunes.  Turk.             

// 

7 

fJ 

'  f 

te 

PX* 

Raisins 

// 

7 

<?* 

9 

¥2 

/ 

^j 

44- 

Mill    Products   and   Corpals 

Corn  Meal 

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126  HIGHER  ACCOUNTING 


Practice  in  Wholesale  Accounting— Continued. 

Shipped  James  Lee,  Vinton,  per  C.  &  N-W.  Ry.,  their  order  Nov.  I,  terms  i  per  cent  10 
days,  net  30  days:  1  brl.  Currants,  256  lbs.,  8  bx.  Cal.  Prunes,  200  lbs.,  10  brl.  Acme  Flour, 
4  sks.  Graham  Flour,  1  sk.  Carolina  Rice,  104  lbs.,  5  bxs.  Laundry  Soap. 

Enter  the  above  on  duplicate  sales  sheets  giving  weights  when  billed  by  the  pound.  Num- 
ber the  order  No.  1.  Then  insert  prices  from  selling  list.  (As  a  substitute  for  a  loose  leaf 
holder,  the  duplicate  sales  sheets  of  this  set  may  be  pinned  together.) 

Shipped  Kingman  &  Co.,  Toledo,  via  L.  S.  &  M.  S.  Ry.,  terms  2-10  n-60,  order  dated  Oct. 
31:3  brls.  C  Sugar,  947  lbs.,  2  brls.  N.  O.  Molasses,  98  gals.,  6  bxs.  Cal.  Prunes,  150  lbs.,  2 
bxs.  Peaches,  100  lbs.,  1  bx.  Raisins,  42  lbs.,  2  sks.  Carolina  Rice,  208  lbs. 

Enter  as  above. 

Shipped  E.  M.  Bundy,  Deerfield,  via  C.  B.  &  Q.,  terms  2-10  n-60,  their  order  Oct.  30: 
Chop  Feed  500  lbs.,  20  sks.  XX  Flour,  4  brls.  Oat  Meal,  556  lbs.,  1  sk.  Carolina  Rice,  114 
lbs.,  1  brl.  Syrup,  45  gals.,  2  ch.  Y.  H.  Tea,   120  lbs.,  1  sk.  Java  Coffee,  102  lbs. 

Shipped  Henry  Thompson,  Thompsonville,  via  C.  B.  &  Q  ,  terms  1-10  n-30,  order  Oct. 
31:2  sks.  Eng.  Walnuts,  200  lbs.,  1  sk.  Pecan  Nuts,  175  lbs.,  5  sks.  Brazil  Nuts,  600  lbs.,  4 
bxs.  Dates,  200  lbs.,  1  bx.  Figs,  50  lbs.,  1   brl.  G  Sugar,  280  lbs. 

Shipped  J.  E.  Overfield,  Overton,  via  C.  &  N.  W.,  terms  1-10  n-30,  his  order  Oct.  31:  4 
bxs.  Dates,  200  lbs.,  1  bx.  Peaches,  50  lbs.,  7  sks.  Graham  Flour,  2  brl.  G  Sugar,  575  lbs.,  1 
brl.  N.  O.  Molasses,  43  gals.,  3  bxs.  L.  Soap. 

Having  entered  above  sales  in  duplicate,  pass  the  originals  to  the  mail  and  post  from  the 
duplicates  to  the  customers'  ledger.     (Refer  to  model  customer's  account  page  121.) 

At  this  point  compute  the  day's  Profits  of  Sales.  For  this  purpose  the  profit  sheet  is 
prepared  containing  a  list  of  the  kinds  of  merchandise  sold.  The  items  of  this  list  are  arranged 
under  the  general  headings  for  speedy  reference.  Each  day  the  person  who  has  to  do  with 
the  markets,  reviews  this  list  and  enters  the  cost  and  selling  prices  and  the  amount  of  profit  or 
loss  on  each  quantity  as  bought  and  sold  at  the  current  day's  figures.  The  cost  price  includes 
the  net  price  at  which  the  package  or  quantity  is  billed  to  the  firm,  plus  carriage.  The  selling 
price  is  computed  at  100  lbs.  or  other  convenient  denomination.  To  illustrate:  take  the  first 
item  of  the  list,  Apricots,  and  assume  that  this  article  is  bought  at  9  cents  per  pound  plus  45 
cents  per  cwt.  carriage,  the  total  cost,  #9.45  per  cwt.,  should  be  deducted  from  the  selling  price, 
n  cts.  per  lb.  or  #11.00  per  cwt,  giving  #1.55  as  the  profit  per  cwt.  When  the  weight  does 
not  enter  into  buying  or  selling  quotations,  the  price  per  quantity  quoted  is  usually  more  con- 
venient. 

Turning  to  the  Profit  Sheet,  to  the  left  of  the  items  are  vertical  listing  columns  to  which 
can  be  carried  the  items  from  the  duplicate  sales  sheets.  To  use  these  columns,  begin  on  the 
line  opposite  the  item  with  the  first  quantity  taken  from  the  duplicate  and  enter  succeeding  sales 
above.  After  all  sales  for  the  day  are  listed,  carry  the  total  of  each  kind  to  the  Quantity  col- 
umn and  make  extensions  to  the  Gross  Profit  column.  For  the  sake  of  uniformity  in  extensions 
call  y2  cent  as  one  cent  additional  and  drop  smaller  fractions.  The  total  of  this  column  will 
give  the  gross  profits  of  the  day's  sales. 

See  illustrated  profit  sheet  on  page  125. 

Paid  cash  to  Graham  &  Co.,  for  rent  of  store  building  to  December  1,  #200. 

It  is  assumed  that  the  checks  are  kept  in  tabs,  checks  tabbed  for  use  with  the  register  are 
frequently  numbered  before  being  tabbed,  as  a  precaution  against  loss  of  any  check  or  the  issu- 
ance of  any  check  that  has  not  been  entered  in  the  register.  Bank  drafts  are  almost  universally 
tabbed  and  entered  in  a  draft  register  in  this  way.  It  is  a  good  rule  to  make  the  entry  in  the 
register  first,  then  fill  out  the  check  afterwards.  The  student  may  make  entry  in  the  check 
register,  assuming  that  the  check  is  written.  Be  sure  to  deduct  the  amount  of  check  from  last 
balance  as  in  model. 

Drew  #50.00  for  sundry  cash  expenses. 

It  is  assumed  that  all  cash  received  in  the  regular  channels  is  deposited  in  the  bank.  The 
cashier  draws  from  time  to  time  certain  amounts  with  which  to  make  small  cash  payments.  He 
keeps  a  record  of  these  payments  in  a  petty  cash  book,  which  need  not  be  illustrated  here. 
Enter  the  check  as  in  model,  December  3. 


WHOLESALE  ACCOUNTING  127 


Paid  to  Lynch  Transfer  Co.  #129.49,  the  amount  of  freight  bills  for  the  invoices  of  mer- 
chandise received  today. 

The  freight  bills  of  the  in-freight  are  paid  by  the  transfer  company  and  collected  by  the 
latter  of  the  consignee,  who  retains  them  as  vouchers.     Enter  as  in  model. 

As  this  completes  the  day's  entries  in  check  register,  the  columns  may  be  footed  and  ruled 
as  shown  in  the  model  and  the  totals  entered  in  journal. 

Post  to  the  general  ledger  all  accounts  found  in  the  general  columns  of  the  journal  or  check 
register.  The  journal  debit  general  column  represents  the  items  posted  from  the  check 
register. 

November  6,   19— 

Received  an  invoice  of  cheese  from  H.  A.  Hudson  Co.,  Falls  City,  dated  Nov.  5,  amount- 
ing to  #392.25  on  account  60  days  or  3  per  cent  discount  12  days.  Enter  voucher  for  net  bill 
as  usual. 

Received  an  invoice  of  goods  amounting  to  #739.12,  from  Cunnard  &  Long,  City,  dated 
Nov.  5,  on  acct,  30  days  or  1^  per  cent  off  10  ds. 

Received  an  invoice  of  goods  from  Hunter  &  Parsons,  Capetown,  dated  Oct.  27,  amounting 
to  #469.29,  invoiced  90  days  or  5  per  cent  discount  30  days. 

Received  an  invoice  of  goods  dated  Nov.  1,  from  Kephart  &  Co.,  Philadelphia,  amounting 
to  #1,641.39,  billed  60  ds.,  2  per  cent  discount  10  ds. 

Received  an  invoice  of  merchandise  from  Silverman  &  Co.,  St.  Johns,  dated  Nov.  1 ,  on 
account  30  days,  without  discount,  amounting  to  #277.80. 

Cash  has  been  received  today  as  follows: 

From  James  Lee,  Vinton,  #107.53,  payment  invoice  Nov.  1. 

Make  entry  of  the  cash  receipt  in  the  credit  register  giving  date,  name,  address,  invoice 
date,  if  it  is  specified,  and  amount  of  cash.  If  the  customer  is  entitled  to  a  discount,  the  discount 
can  be  inserted  in  the  discount  column  at  the  time  of  posting. 

Cash  was  received  from  other  customers: 

J.  E.  Overfield,  Overton,  #79.24,  payment  invoice  Nov.  1. 

E.  M.  Bundy,  Deerfield,  #139.77,  payment  invoice  Nov.  1. 

Henry  Thompson,  Thompsonville,  #80.00  to  apply  on  invoice  Nov.  1. 

Enter  in  credit  register,  then  post  to  sales  ledger.  In  the  first  credit,  that  of  James  Lee, 
it  is  seen  that  he  is  entitled  to  #1.09  discount,  which  will  balance  his  charge  of  #108.62.  Enter 
this  discount  in  the  ledger,  then  transfer  it  back  to  the  discount  column  of  the  credit  register. 
Likewise  credit  the  other  remittances.  No  discount  is  to  be  credited  on  the  partial  payment  of 
Henry  Thompson.  Post  a  partial  payment  of  a  bill  above  the  writing  line  so  that  final  pay- 
ment can  be  posted  on  writing  line. 

Carry  the  total  of  cash  received  to  the  journal,  charging  cash  and  crediting  in  the  general 
column.     Other  columns  of  credit  register  may  be  left  open  until  close  of  month. 

Deposited  cash  in  bank  #406.54,  showing  the  deposit  in  the  check  register. 

Preparatory  to  billing  today's  sales  enter  buying  and  selling  prices  and  profit  per,  on  profit 
sheet  dated  November  6. 

Made  the  following  sales  today: 

Henry  Thompson,  Thompsonville,  his  order  Nov.  5,  via  C.  B.  &  Q.,  terms,  2-10  n-60:  1 
bx.  Turkish  Prunes,  45  lbs.,  2  bxs.  Raisins,  80  lbs.,  5  sks.  Carolina  Rice,  540  lbs.,  1  sk.  Filberts, 
200  lbs.,  2  brls.  G  Sugar,  500  lbs.,  1  brl.  N.  O.  Molasses,  45  gals.,  2  sks.  Java  Coffee,   100  lbs. 

Kingman  &  Co.,  Toledo,  their  order  Nov.  5,  via  L.  S.  &  M.  S.  Ry.,  terms  1-10  n-30: 
Chop  Feed  500  lbs.,  10  bxs.  L.  Soap,  4  sks.  Carolina  Rice,  420  lbs.,  1  brl.  Syrup,  45  gals. 

James  Lee,  Vinton,  his  order  Nov.  6,  via  C.  &  N.  W.,  terms,  1-10  n-30:  2  bxs.  Figs,  100 
lbs.,  5  bxs.  Peaches.  250  lbs.,  10  sks.  Corn  Meal,  25  lbs.  ea.,  4  brls.  Oat  Meal,  536  lbs.,  12  sks. 
Gra.  Flour,  25  lbs.  ea.,  3  ch.  Y.  H.  Tea,  180  lbs. 

James  Finch,  Orchard,  his  order  Nov.  6,  via  S.  C.  &  O.,  terms,  1  %  off  net,  C.  O.  D.:  5 
sks.  Eng.  Walnuts,  500  lbs.,  2  sks.  Pecan  Nuts,  350  lbs.,  10  sks.  Brazil  Nuts,  1200  lbs.,  25  bxs. 
Dates,  1250  lbs.,  3  bxs.  Figs,  150  lbs.,  2  bxs.  Raisins,  84  lbs. 

Allison  Hotel,  City,  their  order  Nov.  6,  delivered,  terms,  net  10  ds. :  12  brls.  Acme  Flour, 
50  sks.  Graham  Flour,  25  lbs.  ea.,  25  sks.  XX  Flour,  50  lbs.  ea.,  5  brls.  C  Sugar,  1580  lbs., 
10  sks.  Java  Coffee,  1000  lbs. 


128  HIGHER  ACCOUNTING 


Colgate  &  Collins,  Fairfax,  their  order  Nov.  6,  via  C.  &  N.  W.  Ry.,  terms,  i-io  n-30:  14 
bxs.  Cal.  Prunes,  25  lbs.  ea.,  5  brls.  Acme  Flour,  5  brls.  Oat  Meal,  700  lbs.,  3  brls.  G  Sugar, 
840  lbs.,  3  brls.  A  Sugar,  900  lbs.,  1  brl.  N.  O.  Molasses,  47  gals.,  4  bxs.  Jap.  Tea,  320  lbs.,  2 
sks.  Rio  Coffee,  240  lbs. 

J.  H.  Lyman,  O'Neill,  his  order  Nov.  5,  via  S.  C.  &  O.,  terms,  net  10  ds. :  5  bxs.  L. 
Soap,  4  brls.  Oat  Meal,  540  lbs.,  Chop  Feed,  1000  lbs.,  1  brl.  N.  O.  Molasses,  43  gals. 

After  passing  out  original  sales  sheets,  post  to  sales  ledger  from  duplicates. 

Compute  profits  of  the  day. 

Kingman  &  Co.  returned  as  unsalable  the  following  goods  from  invoice  Nov.  1. 

3  bxs.  Cal.  Prunes,  75  lbs. 

Enter  same  in  the  return  goods  register,  giving  credit  for  the  amount  charged  at  the  billing 
price. 

The  Allison  Hotel  returned  the  following  goods  billed  to  them  today:  25  sks.  XX  Flour, 
50  lbs.  ea.,  6  sks.  Java  Coffee,  600  lbs. 

Give  credit  on  returned  goods  register  at  prices  bille'd. 

James  Lee  returned  from  invoice  Nov.  1,  8  bxs.  Cal.  Prunes,  200  lbs.,  for  which  he  is  to 
receive  credit  at  the  price  billed,  to  apply  on  subsequent  orders. 

From  the  returned  goods  register  post  these  items  to  the  credit  of  the  customers'  accounts. 
Having  posted  to  ledger,  extend  in  the  Return  Profit  column  the  profit  at  the  rate  credited  on 
the  day  of  sale.     Leave  the  column  open  till  last  day  of  month. 

Enter  check  favor  Lynch  Transfer  Co.,  for  in-freight  on  merchandise  received,  #73.26. 

Referring  to  clip  of  unpaid  vouchers  you  will  find  the  first  one  payable  Nov.  7.  Allowing 
one  day  for  transmission  of  your  remittance  to  the  Great  Northern  Milling  Co.,  remove  the 
voucher  and  enter  in  check  register  as  in  model  form.  Then  fill  check  form  on  reverse  of 
voucher  to  agree  with  entry  in  check  register  and  pass  the  voucher  check  to  the  out-mail.  In 
like  manner  enter  two  vouchers  payable  maturing  Nov.  8,  and  pass  the  voucher  checks  to  the 
out-mail. 

The  last  of  the  three  vouchers  payable  entered  will  show  an  overdraft  at  the  bank.  Place 
this  overdraft  in  balances  column  in  red  ink.  As  the  checks  to  New  York  and  Philadelphia 
cannot  be  returned  and  presented  to  your  drawee  bank  before  two  or  three  days,  the  apparent 
overdraft  is  not  a  real  one  until  the  checks  are  all  paid.  Before  that  time  the  balance  at  the 
bank  should  be  made  safe  by  an  additional  deposit. 

Enter  a  check  favor  C.  A.  Carpenter  on  personal  account  for  #100.  Note  that  the  amount 
of  this  check  will  increase  the  overdraft  balance  written  in  red  ink. 

Enter  a  check  for  weekly  payroll,  #57.40,  charged  to  Cost  of  Shipping. 

Enter  a  check  for  weekly  payroll  to  office  clerks,  #42.10,  and  charge  to  Office  Expenses. 

Make  a  discount  at  bank  on  30  days'  time,  no  days  of  grace,  at  6  per  cent  for  enough  cash 
in  even  thousands  to  balance  the  overdraft  and  to  pay  the  vouchers  payable  maturing  prior  to 
Nov.  15. 

Make  journal  entry  charging  Cash  and  Interest  and  Discount,  and  crediting  Bills  Payable. 
(Entry  in  an  auxiliary  Bills  Payable  Book  need  not  be  made  in  this  set.) 

Enter  the  net  credit,  #2985,  in  check  register  and  extend  the  bank  balance  in  black. 

Post  the  three  items  in  general  column  of  check  register  to  the  general  ledger,  opening  an 
account  with  C.  A.  Carpenter,  personal". 

Foot  the  check  register  and  carry  totals  to  the  journal,  charging  Vouchers  Payable,  Mer- 
chandise, and  General,  and  crediting  Cash. 

As  a  proof  of  the  cash  balance,  compare  the  difference  between  debit  and  credit  cash 
columns,  with  the  balance  on  check  register. 

November  10,  19— 

Engaged  the  services  of  Peter  Henderson  as  traveling  salesman.  The  firm  agrees  to  pay 
him  #100  per  month  and  traveling  expenses.  Open  an  account  in  the  general  ledger  with 
Peter  Henderson  and  charge  this  account  with  cash  advanced  to  him.  He  is  to  be  credited 
monthly  with  salary,  and  weekly  with  traveling  expenses  as  he  reports  the  latter. 

Enter  check  for  $50  handed  to  Peter  Henderson  on  account. 


WHOLESALE  ACCOUNTING  129 


Received  a  bill  of  furniture  and  fixtures  from  Lambert  &  Co.,  City,  amounting  to  $377.21, 
for  which  we  agree  to  pay  cash  Dec.  10. 

Make  voucher  for  this  payment  with  journal  entry. 

Received  from  Dayton  Canning  Co.,  Dayton,  an  invoice  of  goods  dated  Nov.  9,  payable  60 
ds.,  2  per  cent  15  ds.,  amounting  to  $396.41. 

Enter  regularly  for  payment  at  net  amount. 

Make  out  voucher  payable  to  Lee  &  Avery,  attorneys,  in  full  for  services  to  date,  $75. 
Enter  in  journal,  and,  as  you  are  to  pay  this  at  once,  fill  out  the  check  and  enter  in  check 
register,  and  then  pass  to  mail. 

Received  an  invoice  of  merchandise  from  G.  A.  Mullin  Co.,  Cedar  Rapids,  dated  Nov.  9, 
terms  2-10  n-60,  for  $127.66. 

Enter  as  usual. 

Preparatory  to  today's  billing  enter  prices  and  profits  on  daily  profit  sheet  of  this  date. 

Sold  and  shipped  E.  M.  Bundy,  Deerfield,  via  C.  B.  &  Q.,  terms  2-10  n-60,  his  order  Nov. 
9:  4  bxs.  Dates,  200  lbs.,  3  bxs.  D.  Peaches,  150  lbs.,  4  bxs.  Turkish  Prunes,  135  lbs.,  1  brl. 
G  Sugar,  280  lbs.,  4  brl.  N.  O.  Molasses,  179  gals. 

Henry  Thompson,  Thompsonville,  via  C.  B.  &  Q.,  terms  1-10  n-30,  his  order  Nov.  8:  2 
chs.  Jap.  Tea,  160  lbs.,  3  sks.  Eng.  Walnuts,  300  lbs.,  1  brl.  N.  O.  Molasses,  46  gals.,  2  sks. 
Java  Coffee,  200  lbs.,  40  bxs.  L.  Soap. 

Allison  Hotel,  City,  delivered,  net  10  days:  5  brls.  Oat  Meal,  670  lbs.,  10  brls.  Acme 
Flour,  20  sks.  Graham  Flour,  25  lbs.  ea.,  15  sks.  Corn  Meal,  25  lbs.  ea.,  4  sk.  Carolina  Rice, 
420  lbs.,  3  brls.  N.  O.  Molasses,  140  gals.,  6  bxs.  Laundry  Soap. 

James  M.  Finch,  Orchard,  via  S.  C.  &  O.,  terms,  2  per  cent  off,  C.  O.  D.,  his  order  Nov. 
9:  6  brls.  G  Sugar,  1500  lbs,  2  brls.  A  Sugar,  600  lbs.,  4  brls.  N.  O.  Molasses,  180  gal.,  4  brls. 
Acme  Flour,  6  brls.  Oat  Meal,  840  lbs.,  3  sks.  Carolina  Rice,  312  lbs,  10  bxs.  L.  Soap. 

Henry  Thompson,  Thompsonville,  via  C.  B.  &  Q.,  terms,  1-10  n-30,  his  order  Nov.  9:  6 
bxs.  Peaches,  300  lbs.,  1  brl.  Eng.  Currants,  258  lbs.,  2  bxs.  Apricots,  100  lbs.,  5  brls.  Acme 
Flour,  2  sks.  Carolina  Rice,  210  lbs.,  7  bxs.  Laundry  Soap. 

James  Lee,  Vinton,  via  C.  &  N.  W.  Ry.,  terms,  1-10  n-30,  his  order  Nov.  9:  2  brls.  G 
Sugar,  490  lbs.,  1  brl.  C  Sugar,  300  lbs.,  2  sks.  Java  Coffee,  200  lbs.,  3  ch.  Y.  H.  Tea,  180  lbs., 
4  sks.  Almonds,  440  lbs.,  5  brls.  Syrup,  225  gals.,  1  sk.  Filberts,  200  lbs. 

J.  H.  Lyman,  O'Neill,  via  S.  C.  &  O.,  terms,  net  10  days,  his  order  Nov.  8:  10  brls.  Acme 
Flour,  5  brls.  Oat  Meal,  670  lbs.,  6  bxs.  Peaches,  300  lbs.,  1  bx.  Cal.  Prunes,  50  lbs.,  4  sks. 
Brazil  Nuts,  480  lbs.,  1  sk.  Eng.  Walnuts,  100  lbs.,   1  bx.  Dates,  50  lbs. 

Extend  bills  at  today's  prices,  pass  originals  to  mail,  post  from  duplicates  to  sales  ledger, 
and  compute  profits  on  profit  sheet.  (The  loss  on  California  Prunes  can  be  entered  in  red  ink. 
The  total  losses  should  be  deducted  from  total  gains.) 

Received  the  following  remittances  on  account,  which  enter  in  credit  register.  If  no  men- 
tion of  discount  is  made  in  the  remittance,  credit  should  be  given  if  earned. 

From  Kingman  &  Co.,  Toledo,  Inv.  Nov.  1,  cash,  $114.83;  from  Henry  Thompson, 
Thompsonville,  cash  payment  invoice,  Nov.  1,  $73.75;  from  J.  H.  Lyman,  O'Neill,  a  note  for 
$249.04,  which  we  have  accepted  in  full  of  account;  from  Allison  Hotel,  City,  cash  for  balance 
of  invoice,  Nov.  6,  $240.80.  Notice  is  received  from  bank  that  they  have  placed  to  our  credit 
proceeds  of  collection  of  C.  O.  D.,  Nov.  6,  James  M.  Finch,  Orchard,  $384.67,  they  having  de- 
ducted 25  cents  collection  charges.  (Enter  this  credit  at  once  in  check  register  as  a  deposit, 
then  make  entry  in  credit  register  as  of  an  ordinary  remittance.  Credit  the  25  cts.  collection 
charge  in  ledger  to  balance  charge  of  Nov.  6,  then  enter  that  amount  in  the  collection  or  allow- 
ance column  of  credit  register.) 

After  posting  is  completed,  foot  total  cash  receipts  and  carry  total  to  journal.  Enter  de- 
posit of  today's  cash  receipts  with  exception  of  the  C.  O.  D.  credit  at  bank,  which  has  already 
been  entered  as  a  deposit. 

Colgate  &  Collins  have  returned  for  credit  items  of  invoice  Nov.  6:  5  bxs.  California  Prunes, 
125  lbs.,  2  brls.  Oat  Meal,  280  lbs.     (Enter  and  post.) 

Pay  by  check  to  Lynch  Transfer  Co.,  freight  on  today's  receipts,  $89.30,  distributed  as 
follows:     Mdse.  $46.20;  Furniture  and  Fixtures,  $43.10.     Enter  in  check  register. 

Find  in  vouchers  payable  clip  three  vouchers  payable,  one  today  to  a  local  firm  and  two 
on  Nov.  1 1  to  out-of-town  firms.     Enter  these  in  check  register,  fill  checks,  and  pass  to  mail. 


130  HIGHER  ACCOUNTING 


Foot  check  register  and  journalize.  Compare  cash  balance  of  journal  with  balance  in 
check  register.  Examine  duplicate  sales  sheets,  credit  register,  returned  goods  register,  check 
register,  and  journal  to  see  that  postings  of  the  sales  accounts  and  the  accounts  in  the  general 
columns  are  complete. 

November  15,  19— 

Paid  J.  S.  Johnson  &  Son,  Agents,  for  $3000  insurance  on  stock,  in  Merchants  Fire  Insur- 
ance Co.,  Policy  No.  81 119,  by  check,  #43.20. 

Charge  General  Expense. 

Peter  Henderson  sends  expense  account  for  traveling  expenses  of  week  ending  Nov.  15, 
amounting  to  #20.29,  which  is  approved.     Credit  same  in  journal. 

The  student  will  readily  observe  that  if  items  similar  to  the  above  become  numerous  enough  in  a 
business,  a  separate  register  for  this  class  of  entries  should  be  kept  similar  to  the  returned  goods  reg- 
ister, the  credit  register,  and  the  like. 

Enter  a  check  for  #30  favor  Peter  Henderson,  on  account. 

Enter  payment  of  the  two  vouchers  payable,  maturing  on  the  1 5th  and  1 7th  respectively. 

Received  cash  remittances  from  the  following  persons : 

Henry  Thompson,  Thompsonville,  Inv.  Nov.  6,  #135  07 ;  Colgate  &  Collins,  Fairfax,  Inv. 
Nov.  6,  #318.17;  Kingman  &  Co.,  Toledo,  Inv.  Nov.  6,  #75.09;  James  Lee,  Vinton,  Nov.  6, 
#131.41. 

After  entry  of  above  in  credit  register,  journalize  the  day's  receipts  and  deposit  cash. 
Post  to  sales  ledger. 

Total  the  check  register  and  journalize. 

November  18,  19— 

Enter  payment  of  vouchers  due  tomorrow. 

When  the  amount  of  business  is  small,  it  is  not  necessary  to  make  daily  transfers  of  cash  to  the 
journal, 

November  24,  19  — 

Credit  Peter  Henderson  expense  account  for  week  ending  Nov.  20,  #25  19. 

Enter  check  favor  Peter  Henderson  on  account,  #50. 

We  are  unable  to  pay  the  bill  of  Dayton  Canning  Co.  today  and  have  decided  to  defer 
payment  until  maturity,  60  days  from  Nov.  9.  Substitute  the  new  payment  date  on  back  of 
voucher  for  the  present  payment  date  and  add  the  discount  in  red  ink.  When  the  check  pay- 
ing this  item  is  filled,  the  charge  will  be  Interest  and  Discount,  #7.93,  Vouchers  Payable 
#388.48.     Return  the  voucher  to  clip  placing  it  in  the  order  of  date  of  payment. 

Hunter  &  Parsons  have  agreed  to  take  our  interest  bearing  note  for  their  net  invoice  pay- 
able Nov.  26. 

Enter  in  journal  Vouchers  Payable  to  Bills  Payable,  and  mark  the  blank  check  on  back 
"void." 

November  30,  19— 

Credit  each  partner  #100  and  Peter  Henderson  $66.67,  f°r  November  salary,  and  charge 
salaries  account. 

Preparatory  to  closing  the  month's  work,  carry  the  sales  totals  from  the  duplicate  sales 
sheets  to  monthly  summary  sheet  and  foot. 

A  similar  summary  of  the  daily  profits  should  be  made  from  the  profit  sheets.  The  stu- 
dent may  find  the  total  of  profits  on  a  slip  of  paper  and  on  the  monthly  summary  of  sales  de- 
duct the  profit,  leaving  the  difference  opposite  Merchandise. 

Journalize  the  above,  charging  Sales  Ledger  account  and  crediting  Merchandise  and  Profit 
of  Sales. 

Total  the  columns  of  the  credit  register  and  transfer  totals  to  journal,  charging  Discount 
to  Customers,  Collection  and  Allowance,  and  Bills  Receivable,  and  crediting  Sales  Ledger. 
The  cash  debit  should  be  entered  in  general  column,  as  it  has  been  transferred  to  the  cash 
column  daily. 


WHOLESALE  ACCOUNTING  131 


Total  the  returned  goods  register  and  journalize,  charging  Merchandise  and  Profit  of  Sales 
and  crediting  Sales  Ledger. 

Make  the  day's  entries  from  the  check  register. 

Balance  the  journal. 

Finish  posting  the  general  ledger.  Take  a  list  of  sales  ledger  balances  and  compare  it 
with  Sales  Ledger  account  in  the  general  ledger. 

Take  a  list  of  unpaid  vouchers  payable  at  the  net  amount  charged  and  compare  with 
Vouchers  Payable  account  in  the  general  ledger. 

Observations  on  the  Trial  Balance. 

The  student  will  observe  that  since  the  merchandise  account  has  been  charged  with 
cost  of  merchandise  and  credited  with  merchandise  sales  at  cost  price,  the  balance  should 
theoretically  equal  an  actual  inventory  now  taken.  In  practice  such  an  inventory  must 
needs  be  corrected  by  loss  or  gain  by  reason  of  reduction  or  increase  in  value  of  goods 
from  any  cause.  In  most  lines  of  business,  however,  the  actual  value  of  the  merchandise  ac- 
count and  the  profits  of  the  business  can  be  kept  sufficiently  close  for  practical  purposes.  The 
slight  discrepancy  between  the  ledger  balance  and  the  actual  annual  inventory  when  taken, 
can  be  reconciled  by  a  journal  entry  charging  Merchandise  and  crediting  Loss  and  Gain,  or 
the  reverse. 

No  system  of  profit  accounting  can  give  mathematically  accurate  results.  Yet  modern 
business  methods,  especially  in  active  lines,  demand  that  the  business  man  should  have  the 
facilities  for  making  a  safe  estimate  of  his  daily  gains  or  losses. 

The  total  of  open  accounts  in  the  sales  ledger  should  equal  the  Sales  Ledger  balance 
in  the  general  ledger. 

The  list  of  unpaid  vouchers  payable  (net)  should  equal  the  Vouchers  Payable  balance  in 
the  general  Ledger. 

Questions  on  Wholesale  Accounting. 

i.  What  four  natural  divisions  are  found  in  a  wholesale  scheme  of  accounting? 

2.  Describe  the  purchase  method  given. 

3.  Describe  the  sales  method  given. 

4.  How  are  credits  to  customer's  accounts  entered  and  posted  ? 

5.  Name  the  general  books. 

6.  Describe  the  voucher  journal. 

7.  Describe  the  check  register. 

8.  Describe  the  method  of  computing  daily  profits. 

9.  How  are  aggregates  of  sales  ledger  accounts  and  vouchers  payable  verified  monthly  ? 
10.  What  are  the  general  advantages  of  casting  out  the  profits  from  the  merchandise  ac- 
count daily? 


INDEX 


Page 

Abstracts  of  Freight  Forwarded 102 

Abstracts  of  Freight  Received 102 

Abstracts  of  Title . 27 

Account  Sales 3,  4 

Account  Sales  Register 6,  10,  11 

Articles  of  Incorporation— Corporation  Account- 
ing  1 59 

Balance  Sheet— Railway  Accounting 103 

Banking— Daily  Routine 41 

Bank  Statement 45,  51 

Bill  of  Lading— Railway  Accounting 99 

Bills  Receivable— Factory  Accounting 81 

Card  Cabinet— Real  Estate  and  Insurance 29,  30 

Cash  Blotter-  Factory  Accounting 85 

Cash  Book— Banking 44,  48,49 

Cash  Book— Railway  Accounting 96,  97 

Certificate  of  Deposit  Register— Banking 43,  47 

Certified  Check  Register— Banking 43,  47 

Check  Register— Factory  Accounting 75 

Check  Register— Wholesale  Accounting 119 

Collection  Department— Factory  Accounting 78 

Collection  Journal— Factory  Accounting 86,  87 

Collection   Register— Banking 43,  48,  49 

Collection  Tickler— Banking 43 

Commission  Accounting 3 

Commission  Cash  Book 10,  11 

Commission  Merchant 3 

Commission  Sales  Ledger 4,  5 

Consignment 3 

Consignor's  Expense  Bill— Railway  Accounting.101 

Consignee's  Receipt— Railway  Accounting 99 

Corporation  Accounting 58 

Cost  and  Selling  Prices—  Wholesale  Accounting.  124 

Credit  Register — Wholesale  Accounting 122 

Customer's  Ledger  Card 33 

Daily  Profit  Sheet— Wholesale  Accounting 125 

Dealers'  Ledger— Commission 12 

Depositors'  Balance  Ledger— Banking 44,  50,  51 

Discount  Register— Banking 42,  48,  49 

Discount  Tickler— Banking ___  43 

Dividends 69 

Draft  Register— Banking 42,  47 

Duplicate  Bills 121 

Expense  Bill— Railway  Accounting 99 

Factory  Accounting 71 

Freight  Forwarded— Railway  Accounting. _93,  94,  95 
Freight  Received— Railway  Accounting___93,  94,  95 

General  Journal— Factory  Accounting 72,  73,  83 

General  Ledger — Banking 44,  50 

General  Ledger— Commission 14 

General  Ledger — Factory  Accounting 71 

General  Sales  Book 6,  9 

Index  to  Real  Estate  Transfers 26 

Installment  Certificates— Corporation  Account- 
ing  •_ __ 59,  65 


Page 

Installment  List— Corporation  Accounting 59,  64 

Insurance  Policy  Regisrr ___36,  37 

Invoice  of  Shipment 3 

Land  and  Town  Lots 22 

Loose  Leaf  Accounting 6 

Loose  Leaf  Account  Sales 6,  7 

Minute  Book— Corporation  Accounting 58 

Notices  of  Freight— Railway  Accounting 101 

Petty  Ledger— Banking 45,  50,  51 

Policy  Expiration  Card 33 

Practical  Banking 41 

Preferred  Stock— Corporation  Accounting 69,  70 

Purchase  Book ___    8 

Railway  Accounting 93 

Railway  Accounting  Terms 93 

Real  Estate  and  Insurance  Accounting 29 

Real  Estate  Cash  Book 36,  37 

Real  Estate  Plat 24,  25 

Real  Estate  Titles 22 

Real  Estate  Transfers 28 

Receiving  Book 5 

Register  of  Real  Estate  Transfers 26,  27 

Remittance  Register— Banking 42,  47 

Renting  Card— Real  Estate 30,  31 

Report  Blanks— Railway  Accounting ....102,  104 

Returned  Goods  Register— Wholesale  Account- 
ing  122 

Sales  Book— Factory  Accounting 81 

Sales  Department— Factory  Accounting 78 

Sales  Ledger— Factory  Accounting 79 

Sales  Ledger— Wholesale  Accounting 121 

Selling  Card-Real  Estate 32 

Shipment 3 

Shippers'  Bills  and  Receipts— Railway  Account- 
ing  98 

Signature  Book— Banking —  43 

Stock  Certificates— Corporation  Accounting.. 59,  68 

Stock  Journal- Corporation  Accounting 

58,  63,  65,  66,  67 

Stock  Ledger— Corporation  Accounting.__59,  64,  65 
Subscription  List— Corporation  Accounting.. 59,  60 

Superintendent— Factory  Accounting...* 75 

Tenant's  Ledger  Card 31 

Time  Book 77 

Transfer  Book— Coiporation  Accounting 59 

Trial  Balance  Book— Banking 45,  52 

Voucher  Checks 72,  118 

Vouchers  for  Payment 72,  82,  84,  117 

Vouchers  for  Record 72,  74 

Voucher  Journal— Wholesale  Accounting 116 

Voucher  Register— Factory  Accounting 76,  77 

Voucher— Wholesale  Accounting 117,  118 

Way  Bill— Correction  Sheet 101 

Way  Bill— Railway  Accounting 100,  101 

Wholesale  Accounting - H5 


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